LONG-TERM FINANCIAL MANAGEMENT

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? The use of 3 scholarly sources (e.g., textbook, article from the CEC Library) is required.

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