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UPVOTE GUARANTEED!!! PLEASE HELP!!! Luis is considering purchasing and operating a food truck. He estimates the cost of a fully renovated and equipped food truck
UPVOTE GUARANTEED!!! PLEASE HELP!!!
Luis is considering purchasing and operating a food truck. He estimates the cost of a fully renovated and equipped food truck to be $100,000 which would be paid in full at the beginning of the project. He estimates cash flows of $30,000, $50,000, and $70,000 at the end of years 1, 2 and 3 respectively. At the end of year 4 the truck will need to be updated making the expected cashflow at the end of year 4 negative $80,000. Luis plans to operate the truck for one more year and then sell it making the total cash flow at the end of year 5 $73,000. Assume the cost of capital is 20%. Find the NPV of the food truck project. make a recommendation to Luis based on your NPV analysis. Yes, pursue the project No, do not pursue the project No recommendation investors are indifferent No recommendation, NPV cannot be used with these cash flowsStep by Step Solution
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