You own a restaurant and are considering buying a liquor license. You estimate that it will cost you $200,000 to buy a five-year license and construct a bar, and that you will generate $40,000 in after-tax cash flows each year for the next five years. (The cost of the license is capitalized and the cash flows already reflect the depreciation). If your cost of capital is 15%, estimate the net present value of buying a liquor license. (There is no salvage value at the end of the 5 year). ( z a li). ".(
You own a restaurant and are considering buying a liquor license. You estimate that it will cost you $200,000 to buy a five-year license and construct a bar, and that you will generate $40,000 in after-tax cash flows each year for the next five years. (The cost of the license is capitalized and the cash flows already reflect the depreciation). If your cost of capital is 15%, estimate the net present value of buying a liquor license. (There is no salvage value at the end of the 5 year). ( z a li). ".(
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 10PB: Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce...
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