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Find the net present value for the project

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Kenneth Padilla is considering investing in a franchise that will require an initial outlay of $84,000. He conducted market research and found that after-tax cash flows on the investment should be about $24,000 per year for the next 10 years. The franchiser stated that Kenneth would generate a 18.8 percent return. Her cost of capital is 10.6 percent. Find the Net Present Value (NPV) for the project: (Do not round intermediate calculations, round final answer to two decimals, negative should be preceded by - i.e. -123.45) Add your answer

Based on the NPV results you obtained, is the franchise a good investment? Why or why not? Explain fully.

Reference no: EM132999390

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