Calculate the simple payback period for the project

Assignment Help Corporate Finance

Reference no: EM133463931

Homework: Business Investment Report

Length: 15 slides.

Your neighborhood laundromat is for sale and a friend is considering investing in this business. Your friend has asked for your financial advice regarding this endeavor.

For the business alone and no other assets (such as the building and land), the purchase price is $260,000. The net cash flows for the project are $32,000 per year for the next 5 years. The plan is to borrow the money for this investment at 6%.

You will need to submit a presentation sharing your recommendation and you must address the following questions:

Part I: Calculate the Net Present Value and Payback Period:

Question 1) What is the net present value of this project?
Question 2) Calculate the simple payback period for this project. Your desired payback period is 5 years. How long is the payback period for this project?

Use the following template to complete the Unit 4 Excel spreadsheet (IP): Unit 4 IP Homework Template

Part II: Evaluate the investment and provide calculations for an alternative deal:

Question 1) How would you evaluate this investment? What would be a good price at which to purchase this business?

Part III: In a 15-slide presentation, show your calculations and recommendations on whether to purchase the laundromat. Be sure to address the questions above in the presentation.

Reference no: EM133463931

Questions Cloud

What actions if any should you take : You are the CFO of a U.S. firm whose wholly-owned subsidiary in Mexico manufactures component parts for your operations.. What actions, if any, should you take?

How does emily integrate her oral citations : What sources does she use to support her ideas? Do they reflect multiple perspectives? - How would you evaluate her sources? Are they relevant, purposeful

What is the value of the regression coefficient r : DAT 565- What is the value of the regression coefficient, r? What is the value of the coefficient of determination, r^2? What does r^2 tell us?

What communication style did you identify with the least : What communication style did you identify with the least? Do you think the assessment is accurate? Why or why not?

Calculate the simple payback period for the project : Calculate the simple payback period for this project. Your desired payback period is 5 years. How long is the payback period for this project?

Describe how you would use capital budgeting techniques : Describe how you would use capital budgeting techniques to determine whether a business investment is a good idea.

Identify one real-life example of personal ethics : Identify one real-life example of personal ethics and one real-life example of corporate social responsibility in the financial field from the last five years.

How much would bill have to pay for manhattan : How much would Bill have to pay for Manhattan if the "current natives" want a 6% return compounded monthly on the original $24 purchase price?

Consider this quote from cs lewis we read to know that : Would you agree with the statement that "we read to know we aren't alone"? Why or why not? - What is literature? Why is it important to read it?

User Account

All Pages