Hazal reached an agreement to purchase a store in Kadikoy. Hazal pays $3.5 million now for the store and intends to operate the shop as a patisserie for 4 years before selling it for $4.5 million.

(To answer part a and part b, ignore the shops profits and losses)

a. Given an interest rate of 11% calculate the present value of the sales price of the store at the end of 4 years?

(Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.)

b. Should Hazal buy the store?

c-1. What is the present value of future cash flows if Hazal could also profit $250,000 per year from the patisserie? Assume that the annual profits are collected at the year-end until the end of 4 years.

(Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.)

c-2. Should Hazal buy the store if she receives the annual profits stated in c-1?