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You are considering opening a new restaurant in your hometown. You plan on operating the restaurant for four years and then either expand the business
You are considering opening a new restaurant in your hometown. You plan on operating the restaurant for four years and then either expand the business or close the restaurant and move onto something else. Given the estimates below, what is the project value of the new restaurant business? Should you start the business in the first Place if cash flows are discounted at 12%?
YEAR | 0 | 1 | 2 | 3 | 4 |
Cash flow | -$200,000 | $65,000 | 65,000 | 65,000 | 65,000 |
a. | -$124,066 |
b. | $7,593 |
c. | $-2,572 |
d. | $75,933 |
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