YearRestaurant ARestaurant B

0(7,500,000)(9,000,000)

11,600,000 1,700,000

21,800,0002,000,000

32,000,000 2,200,000

42,200,0002,000,000

51,800,000 1,800,000

61,600,0001,600,000

71,400,000 1,400,000

81,300,0001,200,000

91,200,0001,000,000

101,000,0001,000,000

WACC IS 11.85%

1.Calculate the Net Present Value for Restaurant A and Restaurant B.Use the WACC as the cost of capital % calculated in 5 above.

Restaurant ARestaurant B

0

1

2

3

4

5

6

7

8

9

10

Total

Which restaurant should he build?

2.What is the Internal Rate of Return (IRR) for Restaurant A and Restaurant B? Round answer to hundredths place (for example: 12.34%).

IRR Restaurant AIRR Restaurant B

Which restaurant should he build?