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Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $930,000. 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 7 B 9 10 Amount $ 93,000 83,000 73,000 63,000 53,000 If purchased, the restaurant would be held for 10 years and then sold for an estimated $830,000. Required: Determine the present value, assuming that Helga desires a 9% 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. (EY of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and EVAD of $1 Present Value S Future Amount 93,000 83.000 73,000 63,000 53.000 830,000 9% 9% 9% 9% 9% 9% Should the restaurant be purchased? S 0

Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $930,000. 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 7 B 9 10 Amount $ 93,000 83,000 73,000 63,000 53,000 If purchased, the restaurant would be held for 10 years and then sold for an estimated $830,000. Required: Determine the present value, assuming that Helga desires a 9% 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. (EY of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and EVAD of $1 Present Value S Future Amount 93,000 83.000 73,000 63,000 53.000 830,000 9% 9% 9% 9% 9% 9% Should the restaurant be purchased? S 0

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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am. 114.

Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $930,000. 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 1-6 7 8 9 10 Amount $ 93,000 83,000 73,000 $ 63,000 53,000 If purchased, the restaurant would be held for 10 years and then sold for an estimated $830,000. Required: Determine the present value, assuming that Helga desires a 9% 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. (EV of $1. PV of $1, FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Future Amount 93,000 83,000 73,000 63,000 53.000 830,000 9% 9% 9% 9% 9% 9% n= Present Value Should the restaurant be purchased? $ 0
Transcribed Image Text:Helga is considering the purchase of a small restaurant. The purchase price listed by the seller is $930,000. 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 1-6 7 8 9 10 Amount $ 93,000 83,000 73,000 $ 63,000 53,000 If purchased, the restaurant would be held for 10 years and then sold for an estimated $830,000. Required: Determine the present value, assuming that Helga desires a 9% 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. (EV of $1. PV of $1, FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Future Amount 93,000 83,000 73,000 63,000 53.000 830,000 9% 9% 9% 9% 9% 9% n= Present Value Should the restaurant be purchased? $ 0
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