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Theresa is considering starting a small business. She plans to purchase equipment costing $149,000. Rent on the building used by the business will be $26,000
Theresa is considering starting a small business. She plans to purchase equipment costing $149,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $32,400 per year. A market research specialist estimates that Theresa's annual sales from the business will amount to $96,000. Theresa plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? Multiple Choice $37,600 $58,400 $96,000 O None of these answers is correct. Shenandoah Springs Company is considering two investment opportunities whose cash flows are provided below: Year 1 2 3 4 Investment A $(15,500) 5,180 5,180 5,180 4,160 Investment B $(9,600) 5,180 4,160 3,220 1,240 The company's hurdle rate is 10%. What is the present value index of Investment B? (PV of $1 and PVA of $1) (Use approprlate factor(s) from the tables provided. Do not round Intermedlete calculations. Round your answer to two decimal points.) Multiple Choice 1.06 O 1.19 1.00 O
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