NPV unequal

lives.

Grady Enterprises is looking at two project opportunities for a parcel of land the company currently owns. The first project is a restaurant, and the second project is a sports facility. The projected cash flow of the restaurant is an initial cost of $1,500,000 with cash flows over the next six years of $200,000

(year one), $250,000 (year two), $300,000 (years three through five), and $1,750,000 (year six), at which point Grady plans to sell the restaurant. The sports facility has the following cash flows: an initial cost of

$2,400,000 with cash flows over the next four years of $400,000

(years one through three) and $3,000,000 (year four), at which point Grady plans to sell the facility. If the appropriate discount rate for the restaurant is

11.0% and the appropriate discount rate for the sports facility is

13.0%

If the appropriate discount rate for the restaurant is

11.0%, what is the NPV of the restaurant project?

If the appropriate discount rate for the restaurant is

13.0%, what is the NPV of the restaurant project?