Question: John Candy has recently written a business plan to open a chocolate shop in Kamloops, British Columbia. John estimates that he will need $195,000 to

John Candy has recently written a business plan to open a chocolate shop in Kamloops, British Columbia. John estimates that he will need $195,000 to equip the store and an additional $78,500 for inventory and working capital. He has identified a store that is available for rent and the annual cost will be $35,000 per year.John's cash ow forecast in his business plan estimates that the annual cash inow from the business will be to $127,000. Other annual operating costs are expected to amount to $42,750. John plans to operate the chocolate shop for six (6) years. The equipment and other capital assets could be sold in seven (7) years for 15% of their original cost. The working capital will be fully released for other purposes after seven (7) years. John used a discount rate of 14% in his business plan. REQUIRE D: Use the net present value method to determine the net present value of this project. Would you advise John to make this investment? Explain why or why not
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