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You are considering opening a daycare at your restaurant. The daycare alone has a net present value of $15,020.44 and a life of 5 years.

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You are considering opening a daycare at your restaurant. The daycare alone has a net present value of $15,020.44 and a life of 5 years. However, you expect more parents to go out for dinner dates during the week because of this added service. The additional restaurant sales are expected to be $15,000 next year and they will increase by 5% each year. The operating margin for your restaurant is 37% and you have a tax rate of 40%. The cost of capital is 12%. You should open the daycare. True False

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