Question: 1.A local bookstore is considering adding a coffee shop to their store. Building the coffee shop will cost $226,327.00 today. The bookstore is going to
1.A local bookstore is considering adding a coffee shop to their store. Building the coffee shop will cost $226,327.00 today. The bookstore is going to try this project for five years. The bookstore wants a 10.00% return on their investment. What yearly cash flow must this project generate to break-even?
2.Consider the following project:
| Year | 0 | 1 | 2 | 3 |
|---|---|---|---|---|
| Cash flow | -$21.00 | $8.00 | $9.00 | $16.00 |
What is the NPV of this project if the cost of capital is 12.00%?
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