Question
Ernesto Limited has plans of purchasing a new machine to operate a restaurant in the heart of Madina. The Company conducted a market research which
Ernesto Limited has plans of purchasing a new machine to operate a restaurant in the heart of Madina. The Company conducted a market research which revealed that the machine will cost GH 55,469. Available research data reveals that the machine will enable the Restaurant generate sales revenue such that GH 1032, GH 12,060, GH 12,540 and GH 16000 in the first year, second and third year respectively. At the end of the fourth year the machine would be sold at the value of GH 4,860.
Assume that the interest rate is given as 8%. Advise Ernesto if the investment in the machinery is worthwhile (10 marks)
List three (3) advantages and two (2) disadvantages of Net Present Value as an investment appraisal tool (5 marks)
List three (3) benefits of entrepreneurship (3 marks)
Explain the term Intrapreneur as used in Entrepreneurship (2 marks)
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