A private employee who is about to retire is considering two business alternatives. The businesses being...

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A private employee who is about to retire is considering two business alternatives. The businesses being considered are car wash services and laundry services. Initial capital Operating costs Profit Residual value Age of Use Initial capital Operating costs Profit Car Wash Services IDR 255,000,000 IDR 20,000,000/month IDR 25,000/consumer Years 1-2 it is estimated that there will be 30 consumers/day. Years 3-10 are expected to have 40 consumers/day IDR 80,000,000 10 years Laundry Services IDR 200,000,000 IDR 30,000,000/month IDR 20,000/consumer In the first year it is estimated that there will be 45 consumers/day and in the following year there will be 50 consumers/day Residual value IDR 30,000,000 Age of Use 10 years a. make itdiagram cash flow for each alternative and calculate the IRR of each alternative. b. If MARR is determined at 10%, which alternative should be chosen based on the rate of return analysis? Giveexplanation regarding the answers given. A private employee who is about to retire is considering two business alternatives. The businesses being considered are car wash services and laundry services. Initial capital Operating costs Profit Residual value Age of Use Initial capital Operating costs Profit Car Wash Services IDR 255,000,000 IDR 20,000,000/month IDR 25,000/consumer Years 1-2 it is estimated that there will be 30 consumers/day. Years 3-10 are expected to have 40 consumers/day IDR 80,000,000 10 years Laundry Services IDR 200,000,000 IDR 30,000,000/month IDR 20,000/consumer In the first year it is estimated that there will be 45 consumers/day and in the following year there will be 50 consumers/day Residual value IDR 30,000,000 Age of Use 10 years a. make itdiagram cash flow for each alternative and calculate the IRR of each alternative. b. If MARR is determined at 10%, which alternative should be chosen based on the rate of return analysis? Giveexplanation regarding the answers given.

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a To calculate the cash flow diagram and IRR for each alternative we need to determine the cash inflows and outflows for each year based on the provid... View the full answer