Calculate the simple payback period for the project

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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%.

Question 1: What is the net present value calculation for this project.

Question 2: What is the net present value of this project?

Question 3: Calculate the simple payback period for this project. Your desired payback period is 5 years.

Question 4: How long is the payback period for this project?

Question 5: Is this a good investment?

Question 6: What would be a good price at which to purchase this business?

Reference no: EM132485738

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