NPV & Profitabililty index

Use formulas

9:28 AM Mon 9 Nov moodle kaduw KU CAP.BUDG.&LONG-TERM FIN.-425-01-SUMMER 2019/2020 Fogg You are the CEO of Mails-R-Us and you have an empty location of 28m available for rent in the middle of the mall. Two shops have approached you for renting out the location. The size of each shop's location is equal to the resource consumed Your cost of capital is 15% and both shops are in a similar line of business. The rental contract for each shop have the following cash flows every year Size of Year o Location = Year 1 Year 2 Year 3 Year 4 Year 5 resource consumed Shop 1 6,600 6,600 6,600 6,600 27 m2 Shop 2 5,400 5,400 5,400 5,400 5.400 25 m? Please calculate the NPV for both shop rental contracts and indicate which shop you would choose to rent the space out to using the NPV decision rule. Our 1 Not yet answer Marked out of 2500 Fag ques