3. Joe Holiday has the opportunity to operate a business renting beach umbrellas next summer. He...
2. Good Sleep Inc. is considering the purchase of a new mattress assembler that allows the construction of multiple firmness levels in the same mattress. Good Sleep anticipates the following 5-year earnings stream from the sale of this mattresS. Years in the Future Anticipated Profit (000's) 24 26 28 30 4 If the discount rate is 10% and the machine costs $90 (000), payable at once, what is the net present value of the machine? Is it a good purchase?...
William Howe must decide whether to start a business renting beach umbrellas at an ocean resort during June, July, and August of next summer. He believes that he can rent each umbrella to vacationers at $7 a day, and he intends to lease 40 umbrellas for the three-month period for $4,000. To operate this business, he does not have to hire anyone (but himself), and he has no expenses other than the leasing costs and a fee of $3,000 per...