Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. as a new migrant, lisa is currently considering to

As a new migrant, Lisa is currently considering to buy a bottle shop which will be...

50.1K

Verified Solution

Question

Finance

  1. As a new migrant, Lisa is currently considering to buy a bottleshop which will be in operation for 10 years. If purchased, thebottle shop is expected to generate a first cash flow of $90,000this year which is expected to grow at 6.5% p.a. The offer topurchase the business is $500,000. She plans to borrow this moneyfrom one of her friends and he requires 14.5% rate of returnp.a.   Evaluate this project and identify if it is worthbuying.

Answer & Explanation Solved by verified expert
4.3 Ratings (771 Votes)
In order to determine whether the investment is worth it or notLisa needs to determine the NPV of the investment The NPV is thenet present value of all the cashflows of a project over its lifeThe general formula of NPV isHere Ci is the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

As a new migrant, Lisa is currently considering to buy a bottleshop which will be in operation for 10 years. If purchased, thebottle shop is expected to generate a first cash flow of $90,000this year which is expected to grow at 6.5% p.a. The offer topurchase the business is $500,000. She plans to borrow this moneyfrom one of her friends and he requires 14.5% rate of returnp.a.   Evaluate this project and identify if it is worthbuying.

Other questions asked by students

Q

Problem 12-01 AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.2 million in 2016...

Finance
Q

A new operating system for an existing machine is expected to cost $760,000 and have a...

Finance
Q

You titrate 10.0 mL of 0.30 M acetic acid with 0.10 M sodium hydroxide. a. What is...

Chemistry
Q

C++ comments would be nice, especially with \"Customers.dat\" part. Please don't use an already answered solution from chegg....

Programming
Q

Please compose an essay comparing shod and unshod walking and running gait. Please consider the following...

Medical Sciences
Q

Discuss your own experience with social media and whether you believe that social media platforms such...

Psychology
Q

Lorien Corp., a client, has received a research grant from the federal government. As a condition of...

Accounting
Q

7 Cycas a cycad is another seed plant that was very common in the Mesozoic...

Biology
Q

A small spherical object having density 2p is placed inside the liquid of density o...

Physics
Q

Determine if the given function is linear quadratic exponential logarithmic or other g x ex...

Algebra
Q

Goodwill is: a) The residual interest in the assets of the entity after...

Accounting
Q

PLEASE ANSWER ALL PARTS. THANK YOU! Identifying and Analyzing Financial Statement Effects...

Accounting