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Problem C-2A Consider present value (LOC-2, C-3) Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale
Problem C-2A Consider present value (LOC-2, C-3) Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $900,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the following amounts over the next 10 years: Years 1-6 7 8 9 Amount $ 88,000 (each year) 98,000 108,000 118,000 128,000 10 Bruce expects to sell the restaurant after 10 years for an estimated $1,180,000. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.) Required: 1-a. Calculate the total present value of the net cash flows if Bruce wants to make at least 12% annually on his investment. (Assume all cash flows occur at the end of each year.) Answer is complete but not entirely correct. Total present value S 571,510.86 %
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