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If Mike instead invests an additional $5,000 in new equipment and upgrades for the bakery each year, the bakery will remain operational and generate net
If Mike instead invests an additional
$5,000
in new equipment and upgrades for the bakery each year, the bakery will remain operational and generate net cash flows of
$15,000
into perpetuity. Given the same initial investment of
$80,000
and discount rate of
15%
, calculate the NPV of opening the bakery. Should Mike quit his job and start the bakery?
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