Reference no: EM132473393

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%.

Question 1: How can use a net present value calculation for this project. What is the net present value of this project?

Question 2: What is the simple payback period for this project.

• Your desired payback period is 5 years.

Question 3: How long is the payback period for this project?

Question 4: Is this a good investment? What would be a good price at which to purchase this business?

This will be done in excel on a spreadsheet.

1)A Net Present Value calculation,

2) a Simple Payback Period calculation,

3) the answer to question regarding whether this is a good investment and what the best price should be.