John Candy has recently written a business plan to open a chocolate shop in Kamloops, British Columbia. John estimates that he will need $195,000 to equip the store and an additional $78,500 for inventory and working capital. He has identified a store that is available for rent and the annual cost will be $35,000 per year. John's cash flow forecast in his business plan estimates that the annual cash inflow from the business will be to $127,000. Other annual operating costs are expected to amount to $42,750. John plans to operate the chocolate shop for six (6) years. The equipment and other capital assets could be sold in seven (7) years for 15% of their original cost. The working capital will be fully released for other purposes after seven (7) years. John used a discount rate of 14% in his business plan. REQUIRED: Use the net present value method to determine the net present value of this project. Would you advise John to make this investment? Explain why or why not. The present value tables are attached for your reference. You should use the exact numbers as provided in the present value tables (le DO NOT round them up or down). (15 Marks) NOTE re. Rounding: For the Present Value factors, use the exact amounts provided in the Present Value tables. Round the PV factors to THREE decimal places PRESENT VALUE OF $1: 5% 6% Perlod 4% 8% 10% 12% 14% 16% 18% 20% 22% 0.962 0.952 0.943 1 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.820 2 0.925 0.907 0.890 0.857 0.826 0.797 0.769 0.743 0.718 0.694 0.672 3 0.889 0.864 0.840 0.794 0.751 0.712 0.675 0.641 0.609 0.579 0.551 4 0.855 0.823 0.792 0.735 0.683 0.636 0.592 0.552 0.516 0.482 0.451 5 0.822 0.784 0.747 0.681 0.621 0.567 0.519 0.476 0.437 0.402 0.370 6 0.790 0.746 0.705 0.630 0.564 0.507 0.456 0.410 0.370 0.335 0.303 7 0.760 0.711 0.665 0.583 0.513 0,452 0.400 0.354 0.314 0.279 0.249 8 0.731 0.677 0.627 0.540 0.467 0.404 0.351 0.305 0.266 0.233 0.204 9 0.703 0.645 0.592 0.500 0.424 0.361 0.308 0.263 0.225 0.194 0.167 10 0.676 0.614 0.558 0.463 0.386 0.322 0.270 0.227 0.191 0.162 0.137 11 0.650 0.585 0.527 0.429 0.350 0.287 0.237 0.195 0.162 0.135 0.112 12 0.625 0.557 0.497 0.397 0.319 0.257 0.208 0.168 0.137 0.112 0.092 13 0.601 0.530 0.469 0.368 0.290 0.229 0.182 0.145 0.116 0.093 0.075 0.075 0.145 0.116 0.093 0.229 0.182 0.368 0.290 13 0.601 0.530 0.469 0.099 0.078 0.062 0.263 0.160 0.125 0.205 14 0.577 0.505 0.442 0.340 0.084 0.065 0.051 0.140 0.108 0.183 0.417 0.315 0.239 15 0.555 0.481 0.123 0.093 0.163 0.071 0.054 0.042 16 0.534 0.458 0.394 0.292 0.218 0.108 0.146 0.080 0.034 0.270 0.198 0.060 0.045 17 0.513 0.436 0.371 0.180 0.130 0.095 0.069 0.051 0,038 0.494 0.416 0.350 0.250 0.028 18 0.331 0.232 0.164 19 0.116 0.060 0.043 0.475 0.396 0.083 0.023 0.031 0.456 0.377 0.312 0.215 0.149 0.104 20 0.073 0.051 0.037 0.026 0.019 21 0.439 0.359 0.294 0.199 0.135 0.093 0.064 0.044 0,031 0.022 0.015 22 0.422 0.342 0.278 0.184 0.123 0.083 0.056 0.038 0.026 0.018 0.013 23 0.406 0.326 0,262 0.170 0.112 0.074 0.049 0.033 0.022 0.015 0.010 24 0.390 0.310 0.247 0.158 0.1020.066 0.043 0.028 0,019 0.013 0.008 25 0.375 0.295 0.233 0.146 0.092 0.059 0,038 0.024 0.016 0.010 0.007 26 0.361 0.281 0.220 0.135 0.084 0.053 0.033 0,021 0.014 0.009 0.006 27 0.347 0.268 0.207 0.125 0.076 0.047 0.029 0.01801011 0.007 0.005 28 0.333 0.255 0.196 0.116 0.069 0.042 0.026 0.016 0.010 0.006 0.004 29 0.321 0.243 0.185 0.107 0.063 0.037 0.022 0.014 0.008 0.005 0.003 V. V.UTA 0.003 29 0.321 0.243 0.185 0.107 0.063 0.037 0.022 0.014 0.008 0.005 0.003 30 0.308 0.231 0.174 0.099 0.057 0.033 0.020 0.012 0.007 0.004 40 0.208 0.142 0.097 0.046 0.022 0.011 0.005 0.003 0.001 0.001 PRESENT VALUE OF AN ANNUITY: Period 4% 5% 6% 8% 10% 12% 14% 16% 18% 20% 229 1 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.862 0.847 0.833 0.82 2 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.605 1.566 1.528 1.49 3 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.246 2.174 2.106 2.04 4 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.798 2.690 2.589 2.49 5 4.452 4.330 4.212 3.993 3.791 3.605 3.433 3.274 3.127 2.991 2.8 6 5.242 5.076 4.917 4623 4.355 4,111 3,889 3.685 3.498 3.326 13.16 7 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.039 3.812 3.605 3.41 8 6.733 6.463 6.210 5.747 5.335 4.968 4.639 4.344 4.078 3.837 3.61 9 7.435 7.108 6.802 6.247 5.759 5328 4.946 4,607 4.303 4.031 3.78 1 11+ 77 TO 7.435 7.108 9 6.802 6.247 5.759 5.328 4.946 4.607 4.303 4.031 3.78 8.111 7.722 10 7.360 6.710 6.145 5.650 5.216 4.833 4.494 4.192 3.92 8.760 8.306 11 7.887 7.139 6.495 5.938 5.453 5.029 4.656 4.327 4.03 12 9.385 8.863 8.384 7.536 6.814 6.194 5.660 5.197 4.793 4.439 4.12 9.986 13 9.394 8.853 7.904 7.103 6.424 5.842 5.342 4.910 4.533 4.20 14 10.563 9,899 9.295 8.244 7.367 6.628 6.002 5.468 5.008 4.611 4.2 15 11.118 10.380 9.712 8.559 7.606 6.811 6.142 5.575 5.092 4.675 4.31 16 11.652 10.838 10.106 8,851 7.824 6.974 6.265 5.669 5.162 4.730 4.35 17 12.166 11.274 10.477 9.122 8,022 7.120 6.373 5.749 5.222 4.775 4.39 18 12.659 11.690 10.828 9,372 8.2017.250 6.467 5.818 5.273 4.812 4.41 19 13.134 12.085 11.158 9,604 8.365 7.366 6.550 5.877 5.316 4,844 4.44 20 13.590 12.462 11.470 9.818 8.514 7.469 6,623 5.929 5.353 4.870 4.46 21 14.029 12.821 11.764 10.017 8.649 7,562 6.687 5.973 5.384 4.891 4.47 22 14.451 13.163 12.042 10.201 8.772 7645 6,743 6.011 5.410 4.909 4.48 23 14.857 13.489 12.303 10.371 8.883 7.718 6.792 6.044 5432 4.925 445 24 15.247 13.799 12.550 10.529 8.985 7.784 6.835 6.073 5,451 4.937 4.50 25 15.622 14.094 12.783 10.675 9,077 7.843 6.873 6.097 5.467 4.948 4.51 19 13.134 12.085 11.158 9.604 8.365 7.366 6.550 5.87/5.316 4.844 4.44 20 13.590 12.462 11.470 9.818 8.514 7.469 6.623 5.929 5.353 4.870 4.4 21 14.029 12.821 11.764 10.017 8.649 7.562 6.687 5.973 5.384 4.891 4.47 22 14.451 13.163 12.042 10.201 8.772 7.645 6.743 6.011 5.410 4.909 4.48 23 14.857 13.489 12.303 10.371 8.883 7.718 6.792 6.044 5.432 4.925 4.49 24 15.247 13.799 12.550 10.529 8.985 7.784 6.835 6.073 5.451 4.937 4.50 25 15.622 14.094 12.783 10.675 9.077 7.843 6.873 6.097 5.467 4.948 4.51 26 15.983 14.375 13.003 10.810 9.161 7.896 6.906 6.118 5.480 4.956 4.52 27 16.330 14.643 13.211 10.935 9.237 7.943 6.935 6.136 5.492 4.964 4.52 28 16.663 14.898 13.406 11.051 9.307 7.984 6.961 6.152 5.502 4.970 4.52 29 16.984 15,141 13.591 11.158 9.370 8.022 6.983 6.166 5.510 4.975 4.53 30 17.292 15.373 13.765 11.258 9.427 8.055 7.003 6.177 5.517 4.979 4.53 40 19.793 17.159 15.046 11.925 9.779 8.2 8.2.4 7.105 6.234 5.548 4.997 4.54