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The owner of Waco Waffle House is considering an expansion of the business. He has identified two alternatives, as follows Future Value and Present Value
The owner of Waco Waffle House is considering an expansion of the business. He has identified two alternatives, as follows Future Value and Present Value Tables Cash OutfloW: Time 0 Net After-Tax Cash Inflows* Years 1-10 Years 11-20 Investment Mall restau rant 396,500 42,500 42,500 160,500 26,500 restaurant Build a new restaurant near the mall .Buy and renovate an old building downtown for the new restaurant. = :: : "-:" The projected cash flows from these two alternatives are shown below. The owner of the restaurant uses a 8 . percent after-tax discount rate w. * Includes after-tax cash flows from all sources, including incremental revenue, incremental expenses, and depreciation tax shield Required: CPRFEEFEEPERE1. Compute the net present value of each alternative "--" " " ". restaurant site. : " : : : : : : : : : :-:-: 2. Compute the profitability index for each alternative. :23. How do the two sites rank in terms of NPV and the Compute the net present value of each alternative restaurant site. (Round your final answers to the nearest dolar) How do the two sites rank in terms of NPV and the profitability index? Mall restaurant
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