Deal or No Deal?

Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business alone and no other assets (such a building and land), the purchase price is $240,000. The net cash flows for the project are $30,000 per year for the next 5 years. You plan to borrow the money for this investment at 5%.

1. a net present value calculation for this project is required. What is the net present value of this project?
2. Calculate the simple payback period for this project. Your desired payback period is 5 years. How long is the payback period for this project?
3. Is this a good investment and what would be a good price at which to purchase this business?

1) A Net Present Value calculation,

2) A Simple Payback Period calculation,and

3) The answer to question regarding whether this is a good investment and what the best price should be.