Two young entrepreneurs want to invest $200.000 in a restaurant. Their business plan shows that the restaurant will generate the following cash flows: Year Cashflow
Two young entrepreneurs want to invest $200.000 in a restaurant. Their business plan shows that the restaurant will generate the following cash flows: Year Cashflow 1 $20.000 2 $20.000 3 $25.000 4 $25.000 5 $25.000 6 $30.000 7 $30.000 8 $40.000 9 $45.000 10 $50.000 They want to earn at least 10% return They also would like to have their initial investment recovered within 6 years Q1 What is the present value? Q2 What is the net present value? Q3 What is the payback period? Q4 Should these entrepreneurs proceed with this investment? Use Interest Rate Table to solve for asnwering Q1
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