A coffee shop has an expansion project with a cost of$50,000, the expected income is $7,500 per period for 10periods. The expansion is projected to disrupt operationsand to lower sales by $5,000. Determine the Benefit costratio for the project. Consider a 8% interest rate.O 0.911.011.122.51

The objective of the question is to calculate the Benefit-Cost Ratio (BCR) for the expansion project…

Answered: A coffee shop has an expansion project…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Assume that it costs $1,000 to start a project. If the project will give $400 profit in the first year, $500 in the second year and $300 in the third year. find the payback period. Now assume that the interest rate is 10%, find the net present value (NPV) and the profitability index (PI) for this project
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A coffee shop has an expansion project with a cost of $50,000, the expected income is $7,500 per period for 10 periods. The expansion is projected to disrupt operations and to lower sales by $5,000. Determine the Benefit cost ratio for the project. Consider a 8% interest rate. O 0.91 1.01 1.12 2.51