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Liza and her friend are considering which projects should be invested. The first project is...

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Finance

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Liza and her friend are considering which projects should be invested. The first project is a restaurant, and the second project is a business to sell medical equipment. The projected cash flow of the restaurant and the medical equipment business are as below: Project Cost Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 (50,000) 20,000 25,000 30,000 30,000 30,000 17,500 Restaurant Medical Equipment Business (75,000) 40,000 40,000 40,000 40,000 26,000 32,000 If the appropriate discount rate for the restaurant is 13% and the medical equipment business is 8%, help Liza and her friend answer the following questions. a) Compute the net present value (NPV) for each project. (5 marks) b) Is it better to get the same amount of cash flow earlier or later? Critically discuss the NPV method by using the current case study to support your discussions

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