P12.3 An investor is planning to open a new fast-food restaurant. He has a five-year lease on a property that would require an investment estimated at $205,000 for redecorating and furnishing. He would use his own cash. The present cost of capital (borrowed money) is 13 percent. Use this figure as the discount rate. Calculation of net cash flow from the restaurant for the five years of operation shows Year Cash Flow 1 $37,500 2 43,800 3 46,300 4 50,000 5 60,000