Johnson & Johnson Corporation has plan to diversify their business. One is to open a fast-food restaurant and the other one is an opening of boutique. Both are located in Kuala Lumpur and both projects are forecast to be opened in June 2022. Fast-food restaurant has been given the name as J&J Restaurant and the initial investment is RM150,000. While the boutique has been given name as Jie & Joe ane the cost involved is about RM100,000. The cost of capital is 12%. As a finance manager you are forecasting both projects on the annual cash flow based on few methods. The cash flow are as follows: J&J Restaurant Annual Cash Flows: 1st year RM40,000, 2nd year increase to RM55,000, 3rd year increase by RM10,000, the 4th year is RM70,000 and the 5th year is RM85,000 Jie &Joe Boutique Annual Cash Flows: 1* year RM30,000, 2nd year increase by RM15,000, 3rd year is RM45,000 and the 4th year is RM50,000 and the 5th year is RM70,000 You determine the above annual cash flows according to:

Johnson & Johnson Corporation has plan to diversify their business. One is to open a fast-food restaurant and the other one is an opening of boutique. Both are located in Kuala Lumpur and both projects are forecast to be opened in June 2022. Fast-food restaurant has been given the name as J&J Restaurant and the initial investment is RM150,000. While the boutique has been given name as Jie & Joe ane the cost involved is about RM100,000. The cost of capital is 12%. As a finance manager you are forecasting both projects on the annual cash flow based on few methods. The cash flow are as follows: J&J Restaurant Annual Cash Flows: 1st year RM40,000, 2nd year increase to RM55,000, 3rd year increase by RM10,000, the 4th year is RM70,000 and the 5th year is RM85,000 Jie &Joe Boutique Annual Cash Flows: 1* year RM30,000, 2nd year increase by RM15,000, 3rd year is RM45,000 and the 4th year is RM50,000 and the 5th year is RM70,000 You determine the above annual cash flows according to:

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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