Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. question 4 (25 marks) you are working for an entre

QUESTION 4 (25 MARKS) You are working for an entrepreneur who owns a number of...

70.2K

Verified Solution

Question

Finance

image

QUESTION 4 (25 MARKS) You are working for an entrepreneur who owns a number of small businesses in Barcelona, Spain, as well as a small piece of property near Barcelona University, which he believes would be an ideal site for a student-oriented mini market store. His 12-year-old son, who happens to be in the office after school, says he has better idea; his father should open a lemonade stand. Your boss tells you to find the NPV and IRR for both projects, assuming a 10% discount rate. After collecting data, you present the following analysis: Year Lemonade Stand Mini Market Store 0 1 2 3 - 1,000 850 850 850 850 76.2% 1,694 - 1,000,000 372,000 372,000 372,000 372,000 18.0% 179,190 4 IRR NPV Assuming the project is mutually exclusive, which should be selected? Explain your argument

Answer & Explanation Solved by verified expert
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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students