Prepare a net present value calculation for the project

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Reference no: EM132474019

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%.

Question 1: Prepare a net present value calculation for this project. 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?

Question 3: Is this a good investment? What would be a good price at which to purchase this business?

Reference no: EM132474019

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