Calculate the simple payback period for this project

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Deal or No Deal?

Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business alone and no other assets (such as building and land), the purchase price is $240,000. The net cash flows for the project are $30,000 per year for the next 5 years. You plan to borrow the money for this investment at 5%.

Prepare a net present value calculation for this project. What is the net present value of this 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?

Is this a good investment? What would be a good price at which to purchase this business?

Reference no: EM132579819

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