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Please answer all 3 questions Which investment option has the highest Net Present Value (NPV)? Use a discount rate of 10% Investment A: Hair salon
Please answer all 3 questions
Which investment option has the highest Net Present Value (NPV)? Use a discount rate of 10% Investment A: Hair salon with an up-front cost of $100,000 and an annual operating cash flow of $35,000 for the first 5 years, $37,000 for the next 5 years. Good for 10 years. Investment B: Bakery with an up-front cost of $200,000 and an annual operating cash flow of $50,000 for the first five years, $47,000 for the next 5 years. Good for 10 years. Investment C: Restaurant with an up-front cost of $300,000 and an annual operating cash flow of $65,000 for the first five years, $65,500 for the next 5 years. Good for 10 years. Investment D: Hotel with an up-front cost of $750,000 and an annual operating cash flow of $135,000 for the first five years, $144,000 for the next 5 years. Good for 10 years. Question 13 5 pts Paolo lives in an economy where the only good for sale is a burger. In 2021, a burger costs $10, and in 2022, a burger costs $11.60. Paolo had $500 in his savings in 2021 that grew to $625 in 2022. What is the real interest rate of Paolo's savings account? Hint: Inflation rate in decimal form = (Price in 2022 - Price in 2021)/(Price in 2021) 6.8% 7.8% 9.6% 25% U Question 14 2.5 pts Suppose the discount rate is 10%. A $100 bond has a coupon rate of 7%. What type of bond will this be? Premium bond Par value bond Discount bondStep by Step Solution
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