Rob wants to decide between building Restaurant A or Restaurant B. The following are projected cash...

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Rob wants to decide between building Restaurant A or Restaurant B. The following are projected cash flows for the restaurants. Year 0 1 2 S 10 Restaurant A (9,500,000) 1,500,000 1,900,000 2,000,000 2,200,000 1,400,000 Payback Restaurant A = 1,800,000 1,700,000 1,000,000 1,100,000 1,400,000 Restaurant B (12,000,000) 1,100,000 1,500,000 Payback Restaurant B 2,100,000 1,600,000 2,000,000 1,300,000 5. What is the payback period for Restaurant A and Restaurant B? If Rob requires a payback period of 5 years, which restaurant(s) should he acquire? Round answer to hundredths place (for example: 12.34). 1,400,000 1,500,000 1,300,000 1,100,000 Acquire? 6. Calculate the WACC for Rob's Restaurants. Assume 13% cost of debt, 12% required return on preferred stocks, and 14% required return on common stocks. Also assume 40% taxes. Round answer to the hundredths place (for example: 12.34%). WACC = Rob wants to decide between building Restaurant A or Restaurant B. The following are projected cash flows for the restaurants. Year 0 1 2 S 10 Restaurant A (9,500,000) 1,500,000 1,900,000 2,000,000 2,200,000 1,400,000 Payback Restaurant A = 1,800,000 1,700,000 1,000,000 1,100,000 1,400,000 Restaurant B (12,000,000) 1,100,000 1,500,000 Payback Restaurant B 2,100,000 1,600,000 2,000,000 1,300,000 5. What is the payback period for Restaurant A and Restaurant B? If Rob requires a payback period of 5 years, which restaurant(s) should he acquire? Round answer to hundredths place (for example: 12.34). 1,400,000 1,500,000 1,300,000 1,100,000 Acquire? 6. Calculate the WACC for Rob's Restaurants. Assume 13% cost of debt, 12% required return on preferred stocks, and 14% required return on common stocks. Also assume 40% taxes. Round answer to the hundredths place (for example: 12.34%). WACC =

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1 Calculate the payback period For Restaurant A Year 0 Cash Flow 9500000 Year 1 Cash Flow 1100000 Year 2 Cash Flow 1900000 Year 3 Cash Flow 1500000 Ye... View the full answer