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Newby's Restaurant is a restaurant venture being started by a friend of yours. She has developed a five year plan for the restaurant, which calls
Newby's Restaurant is a restaurant venture being started by a friend of yours. She has developed a five year plan for the restaurant, which calls for it to pay a share of its profits to investors (equal to their ownership share) over the 5 years, and then the restaurant would be sold at the end of the five 5 years, with the investors receiving a share of the selling price equal to their ownership share. The restaurant is expected to break even in year 1, then earn $100,000 per year for the following 4 years, and then be sold for $1,000,000 at the end of year 5. C. Suppose you feel that a 20% return is appropriate for this investment. Given that, how much is this restaurant worth now? d. If you were to invest $50,000 in Newby's, what % of the restaurant would you expect to own
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