Question
You own a coffee shop. It generates $10,000 at the end of each year (first $10,000 1 year from today). You are considering remodeling it
You own a coffee shop. It generates $10,000 at the end of each year (first $10,000 1 year from today). You are considering remodeling it into a scooter rental business. The remodel will cost $45,000 today and construction will take 2 years. Afterwards, the rental business will generate $25,000 each year. You purchased the building for your business three years ago for $1 million, so you are not worrying about any rental fees.
(Do not put $ sign or commas. If your answer is negative, put - before your answer.)
a) Find the initial costs
b) Find the net cash flows (Cash outflows(costs) + Cash inflows(revenues)) in year 2
c) Find the net cash flows (Cash outflows(costs) + Cash inflows(revenues)) in year 3
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