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Prepare a capital budget for the Hot New Caf with the net cash flows for this project over a 5-year period. Calculate the payback period
- Prepare a capital budget for the Hot New Caf with the net cash flows for this project over a 5-year period.
- Calculate the payback period (P/B) and the net present value (NPV) for the project.
- Answer the following questions based on your P/B and NPV calculations:
- Do you think the project should be accepted? Why?
- Define and describe net present value (NPV) as it pertains to the new cafe.
- Assume the company has a P/B (payback) policy of not accepting projects with a life of over 3 years. Do you think the project should be accepted? Why?
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Financial Reporting Financial Statement Analysis And Valuation A Strategic Perspective
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
8th Edition
1285190904, 978-1305176348, 1305176340, 978-1285190907
