Q: what is the sale price of the restaurant at the end of year 4??

QUESTION 1 5 points Krista and Sammie came across this opportunity to open up a Poke restaurant. The initial investment is anywhere in the low $90K to $205K. Looking at the possibilities in the Houston area, they think the initial investment will only be $180,000. With estimated sales, all expenses, including an annual $30,000 franchise fee, they believe the net cash flow for the first four years are $25,000, $50,000, $65,000, $70,500 respectively. They also look at this a pure investment and would like to sell it after year 4 when they are expecting the highest net cash flow. If their cost of capital is 9.5% and their cap rate is 18%, please provide the answers for the following questions. What is the payback period of this investment? If the payback criterion is 3 years, should they invest? ** For ALL questions, please show all calculation and explain. No points will be given if you simply put a yes or a no without any calculation or explanation.**