Problem $5-4($Algo$)$ Investment analysis; uneven cash flows $[$LO$5-3,5-8]$

Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $$810,000.$ Helga has used past financial information to estimate that the net cash flows $($cash inflows less cash outflows$)$ generated by the restaurant would be as follows:

Years Amount

$1-6$ $ $81,000$

$771,000$

$861,000$

$951,000$

$1041,000$

If purchased, the restaurant would be held for $10$ years and then sold for an estimated $$710,000.$

Required:

Determine the present value, assuming that Helga desires a $12\%$ rate of return on this investment. $($Assume that all cash flows occur at the end of the year.$)$

Note: Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. Use tables, Excel, or a financial calculator. $($FV of $$1,$ PV of $$1,$ FVA of $$1,$ PVA of $$1,$ FVAD of $$1$ and PVAD of $$1)$