John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $800,000. John has used past financial information to estimate that the net cash flows (Cash inflows less cash outflows) generated by the restaurant would be as follows: I= Years 1 through 6 7 8 9 10 10 Amount $ 80,000.00 $ 70,000.00 $ 60,000.00 $ 50,000.00 $ 40,000.00 $ 700,000.00 PV Factor of $1 PV of Cash Flows 10% 10% 10% 10% 10% 10% If purchased, the restaurant would be held for 10 years and then sold for an estimated $700,000