Question
Jenny has rich parents who gifted her $5million to start a business. With encouragement from her MBA professor she decides to invest in her passion
Jenny has rich parents who gifted her $5million to start a business. With encouragement from her MBA professor she decides to invest in her passion for setting up a coffee shop with a lounge to attract UIS and Lincoln Land students on Toronto Road. Based on market research and forecasts of sales, Jenny is looking at a few investment options that are listed below. Current rate of interest is 5%:
| Investment today (in $ million) | Future cash Flow (a year from today) |
| 1.0 million | 1.8 |
| 2.0 | 3.3 |
| 3.0 | 4.4 |
| 4.0 | 5.5 |
| 5.0 | 6.0 |
How much of the $5 million should Jenny invest in her Coffee shop lounge?
How much of the $5 Million can Jenny consume today? Why?
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