John Wiggins is considering the purchase of a small restaurant.
The purchase price listed by the seller is $920,000. John has used
past financial information to estimate that the net cash flows
(cash inflows less cash outflows) generated by the restaurant would
be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of
$1 and PVAD of $1) (Use appropriate factor(s) from the
tables provided.)
Years | Amount | |||
1-6 | $ | 92,000 | ||
7 | 82,000 | |||
8 | 72,000 | |||
9 | 62,000 | |||
10 | 52,000 | |||
If purchased, the restaurant would be held for 10 years and then
sold for an estimated $820,000.
Required:
Determine the present value, assuming that John desires a 10% rate
of return on this investment. (Assume that all cash flows occur at
the end of the year.) (Do not round intermediate
calculations. Round your final answers to nearest whole dollar
amount.)
Net Present value = Present value of cash inflows + Present value of resale value - Initial investment
= (92000*4.3553 + 82000*0.5132 + 72000*0.4665 + 62000*0.4241 + 52000*0.3855)+820000*0.3855 - 920000
= $-81192
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $920,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years Amount 1-6 $ 92,000 7 82,000 8 72,000...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $820,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years 1-6 7 8 Amount $82,000 72,000 62,000 52,000...
Check my work View previa John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $920,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years 1-6 7 8...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $960,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years 1-6 7 8 9 10 Amount $96,000 86,000...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $890,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1. PV of $1. FVA of $1. PVA of $1. FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years 1-6 7 Amount $89.000 79,00 69,000 59,000 49.000...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $890,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Years 1-6 Amount $ 89,000 79,000 69,000 59,000 49,000...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $920,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows year amount 1-6 92000 7 82000 8 72000 9 62000 10 52000 If purchased, the restaurant would be held for 10 years and then sold for an estimated $820,000. equired: Determine the present value, assuming...
c John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $880,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: (FV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $.1) (Use appropriate factor(s) from the tables provided.) Years 1.6 7 8 9 10 Amount $88,000...
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $970,000. John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows:
Bruce is considering the purchase of a restaurant named Hard Rock Hollywood. The restaurant is listed for sale at $1,100,000. With the help of his accountant, Bruce projects the net cash flows (cash inflows less cash outflows) from the restaurant to be the following amounts over the next 10 years: Years Amount 1-6 $ 90,000 (each year) 7 100,000 8 110,000 9 120,000 10 130,000 Bruce expects to sell the restaurant after 10 years for an estimated $1,200,000. (FV of...