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Evaluate what is the present value of the investment

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Question 1: Sarah is evaluating whether she should take over a retail business. The current owner had originally signed a 25-year lease, of which 15 years still remain. The restaurant has been growing steadily at a 5 per cent growth for the last several years. Sarah expects the business to continue to grow at the same rate for the remaining lease term. At the end of last year, the business had a net cash flows of $310,000. What is the present value of this investment if the discount rate is 15%?

Reference no: EM132554428

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