Naomi has always wanted to open a cyber coffee shop and has made her cash flow projections.

Naomi has always wanted to open a cyber coffee shop and has made her cash flow projections. She estimates that it will cost her $225,000 to develop the project, and the cash flows for the next six years will be $45,000, $69,000 , $125,000, $185,000, $189,000 and $200,000 respectively.

1. If her cost of capital is 9.5%, what is the net present value and internal rate of return of her project ?

2. Should she accept or reject this investment ?

3. What would be the payback period for Naomi’s proposal in the preceding question ?

4. If the maximum allowable time is 2.5 years, should Naomi accept this project ?

Bernard has been approached about a hotel investment proposal by a young entrepreneur named Winston. The young man seems to have done his homework and presents Bernard with a five-year pro forma showing cash flows of $128,000, $138,900, $141,250, $142,870 and $146,780 respectively. Bernard knows he can earn an 8% return if he puts his money in a mutual fund. Winston is asking for $500,000.

1. What is the internal rater of return of this project ?

2. Should Bernard invest in this project ?

3. If you assume 8% as the cost of capital, compute net present value.

Show more

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more