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Thinking of opening an italian restaurant

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Bella Swan and Edward Cullen are thinking of opening an Italian restaurant. Setting up the restaurant is very expensive and costs $400,000 today and $200,000 the first year. However, they expect to earn $150,000 their first year, $130,000 the next year, $100,000 the third year, $200,000 the fourth year, and a whopping $300,000 their fifth year.

If interest rates are currently 10%, should they open the restaurant of their dreams?

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Reference no: EM132523423

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