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Cara has recently retired and is now considering starting a new business of selling tacos at local companies. She can purchase a used taco truck
Cara has recently retired and is now considering starting a new business of selling tacos at local companies. She can purchase a used taco truck that has a useful life of years, but that is great because she only wants to work for another years. The salvage value of the truck will be zero at the end of the years cant even sell for junk and the value of her business will also be zero there are no barriers to entry, thus the value of the business is nil She estimates that the new business will have one of the two cash flows below for the next years. She requires a rate of return given the cost of capital and the opportunity costs of giving up her free timeYou must show your work using Excel to calculate and must upload Excel spreadsheet. Do NOT submit PDF or picture of the Excel spreadsheet
For both cashflows, answer the following questions:
What is NPV for this investment? show your work using Excel spreadsheet
What is the IRR? show your work from Excel spreadsheet
Should she invest in the taco truck given the NPV andor IRR? Why or why not?
Cash Flow Scenario different cash flow during years through :
Initial Cost $
Life of the Project years
Salvage Value $
Required Rate of Return
Annual Cash Flows
Year $
Year $
Year $
Year $
Year $
Year $
Year $
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