The Hangover Diner is considering a project to build a new diner next to Saint Joseph's...
The Hangover Diner is considering a project to build a new diner next to Saint Joseph's University with an initial cost of $350,000. Construction will take 3 years. The diner will open in year 4, so no cash will be received in the first 3 years. At the end of the fourth year, the diner expected to produce a cash inflow of $100,000. Starting in the fifth year the cash flows are expected to grow by 2% per year forever. What is the project's net present value today at a 16% discount rate?
A. -$4,818
B. $44,494
C. $50,411
D. $107,613
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