Question
You wish to purchase a Five Guys Restaurant in 2019. You will need $30,000 to pay for the business assets/inventory and $20,000 of net-working capital.
You wish to purchase a Five Guys Restaurant in 2019. You will need $30,000 to pay for the business assets/inventory and $20,000 of net-working capital. This is a three-year investment. At the end of three years, however, you can sell the existing inventory for $5,000.00 and will no longer need to utilize the net working capital. You anticipate the cashflow at the end of year one to be $8,000.00; the end of year two to be $12,000 and the end of year 3 to be $16,000. Using the anticipated cash flows from Five Guys Restaurant - is this a good investment and calculate the following the NPV and the payback period using years and months
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