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George is interested in buying one of the two local businesses on sale: a Coffee Shop or a Shoe Store. The cashflows of both the

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George is interested in buying one of the two local businesses on sale: a Coffee Shop or a Shoe Store. The cashflows of both the businesses are shown below. George can borrow from a bank at a rate of 8.00% to buy Coffee Shop and 6.00% to buy Shoe Store Coffee Shop Shoe Store Year -$100,000 $100,000 O (Purchase Price) $7,188 $51,750 1 $21,562 $38,812 2 $40,250 $28,750 3 $50,315 $21,563 4 $57,500 $14,375 5 If George buys the Coffee Shop instead of Shoe Store, How much extra NPV will he get? Enter your answer in the following format: + or - 1,234; Hint1: Answer is between -1,861 and -2,368 Hint2: Compute NPV(Coffee Shop) - NPV (Shoe Store)

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