Worksheet 36 Investment Appraisal (3) Freyre Fries (FF) Freyre Fries (FF) is a snack shop, opened by Maxime Freyre in the city of Toulouse, France. FF specializes in a variety of French snacks, such as macarons, crepes, croissants and French baguettes. As part of their primary research, FF recently found the following from using a focus group: . customers have complained about long queues at FF the quality of the French fries has been deteriorating; for example, one customer noted "the fries are getting more and more soggy during my repeat purchases". To address these problems, Maxime has decided to upgrade the frying machines. After conducting extensive research, he shortlisted two possible frying machines that FF could invest in. Frying Machine 1: Fast Fryer Cost 75,000 Annual repair cost of 1,500 Frying Machine 2: Quick Fry Cost 88,000 Bi-annual repair cost of 1,200, starting in Year 1 Table 1: Estimated annual return (total revenue) per year for each machine (in ) Year 1 Year 2 Fast Fryer 21,500 21,500 Quick Fry 26,200 28,500 (a) Define the term focus group. Year 3 21,500 34,450 Year 4 21,500 35,000 Year 5 21,500 39,000 [2 marks] (b) Using the above information, calculate the total net return from investing in the Fast Fryer (show all your working). [2 marks] (c) Using your result from part (b), calculate the payback period of the Fast Fryer machine for FF (show all your working). [2 marks] V(HL) (1) of Toronto in C Sen CRB has farget market: e restaurant h to 2 hours wait sing rental pric ad in his kitche Japanese term d ramen nood concerned abo two ramen no (d) Using the above costs information, calculate the payback period for the Quick Fry machine for FF (show all your working). t shine 1 [2 marks] 20,000 $5.000 $1,000 gby 5% per ye Mac (e) Using the above information, calculate the average rate of return (ARR) of the Quick Fry machine for FF (show all your working). [2 marks] trol. actors pr Machine 1.