Hazal reached an agreement to purchase a store in Kadikoy. Hazal pays $2.8 million now for...
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Hazal reached an agreement to purchase a store in Kadikoy. Hazal pays $2.8 million now for the store and intends to operate the shop as a patisserie for 4 years before selling it for $3.8 million. (To answer part a and part b, ignore the shop's profits and losses) a. Given an interest rate of 11% calculate the present value of the sales price of the store at the end of 4 years? (Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.) b. Should Hazal buy the store? e-1. What is the present value of future cash flows if Hazal could also profit $180,000 per year from the patisserie? Assume that the annual profits are collected at the year-end until the end of 4 years. (Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.) c-2. Should Hazal buy the store if she receives the annual profits stated in c-1? b. C-1. c-2. present value of the sales price Should Hazal consider purchasing the store? present value of future cash flows with patisserie income Should Hazal consider buying the patisserie now? million million Hazal reached an agreement to purchase a store in Kadikoy. Hazal pays $2.8 million now for the store and intends to operate the shop as a patisserie for 4 years before selling it for $3.8 million. (To answer part a and part b, ignore the shop's profits and losses) a. Given an interest rate of 11% calculate the present value of the sales price of the store at the end of 4 years? (Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.) b. Should Hazal buy the store? e-1. What is the present value of future cash flows if Hazal could also profit $180,000 per year from the patisserie? Assume that the annual profits are collected at the year-end until the end of 4 years. (Intermediate computations should not be rounded. Fill in the blanks with your answer in millions, rounded to three decimal places.) c-2. Should Hazal buy the store if she receives the annual profits stated in c-1? b. C-1. c-2. present value of the sales price Should Hazal consider purchasing the store? present value of future cash flows with patisserie income Should Hazal consider buying the patisserie now? million million
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Financial Accounting Information for Decisions
ISBN: 978-1259533006
8th edition
Authors: John J. Wild
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