Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business
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Question:
Your neighborhood self-service laundry is for sale and you consider investing in this business. For the business alone and no other assets (such as building and land), the purchase price is $240,000. The net cash flows for the project are $30,000 per year for the next 5 years. You plan to borrow the money for this investment at 5%.
Prepare a net present value calculation for this project. What is the net present value of this project?
Calculate the simple payback period for this project. Your desired payback period is 5 years. How long is the payback period for this project?
Is this a good investment? What would be a good price at which to purchase this business?
Related Book For
Interpreting and Analyzing Financial Statements
ISBN: 978-0132746243
6th edition
Authors: Karen P. Schoenebeck, Mark P. Holtzman
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