• Do you mind to explain on how to get the Present value of net cash flow in years 1-4 discounted 20% with. the answer -20,255. thnk
  

Year 1 Year 2 Year 3 Year 4 years $1,000,000 1) Sales $300,000 $600,000 $900,000 $1,000,000 2) Cash flows from operations $100,000 $ 50,000 +$ 75,000 +$ 250,000 +$ 250,000 ) Increase in working capital $ 50,000 $ 20,000 $ 10,000 $ 10,000 Net cash flows (2) - (3) -$150,000 -$ 70,000 $ 65,000 $ 240,000 $ 250,000 Present value of net cash flows in years 1-4 (discounted at 20%) $ 20,255 Present value of terminal value $250,000 X +$602,816 0.20 (1.20)4 Present value of restaurant $ 582,561 Cost of building $700,000 Net present value of restaurant -$117,439