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C. You are considering two projects (1) Franchise L Lisa's Soups, Salads, & Stuff and (2) Franchise S, Sam's Fabulous Fried Chicken. Franchise L's cash
C. You are considering two projects (1) Franchise L Lisa's Soups, Salads, & Stuff and (2) Franchise S, Sam's Fabulous Fried Chicken. Franchise L's cash flows will start off slowly but will increase rather quickly as people become more health conscious, while Franchise S's cash flows will start off high but will trail off as people become more health conscious and avoid fried foods. Franchise L serves breakfast and lunch, while Franchise S serves only dinner, so it is possible for you to invest in both franchises. The expected cash flows are as below. Cost of capital is 10% Net cash flows (in thousands of dollars): Year Project L 0 $(100) 1 10 2 60 3 80 Project S $(100) 70 50 20 1. What is the NPV for Project L? 2. What is the NPV for Project S? 3. What is the IRR for Project L? 4. What is the IRR for Project S? 5. What is the MIRR for Project L? 6. What is the MIRR for Project S? 7. What is the Profitability Index for Project L? 8. What is the Profitability Index for Project S? 9. Based on your analysis above if the projects are mutually exclusive, which project should you go with? 10. What is the payback period for Project L? 11. What is the discounted payback period for Project L
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