Question: Important: . Please type the number without the comma sign. Keep 2 decimal places. Bill plans to open a do-it-yourself dog bathing center in a
Important: . Please type the number without the comma sign. Keep 2 decimal places. Bill plans to open a do-it-yourself dog bathing center in a storefront. The bathing equipment will cost $100,000. Bill expects the incremental net operating cash flows to be $30,000 in the first year. $80,000 in the second year, and $60,000 in the third year, after which he plans to scrap the equipment and retire to the beaches of Jamaica, WACC is 10%. a. What is the project's NPV? (3 points) NPV= b. What is the project's discounted payback period? (8 points) year CF Discounted CF Cumulative discounted CF 0 -1000 - 1000 -1000 300 2 800 600 Discounted payback period years c. A project has the following cash flows: Year o 1 2 3 4 Cash flows -$2,700 $650 + +X $1,400 This project requires one outflows at Year 0 followed by four positive cash flows. Its WACC is 10%. and its MIRR is 7.8367%. Year 2 and Year 3 cash flows are equal. What is the Year 2 and Year 3 cash inflows? (7 points)
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