Finance

Year Cash Flow
1 $695,000
2 876,250
3 1,057,500
4 1,238,750
5 1,420,000

1. Calculate the IRR and NPV of this project utilizing a 12% discount rate and a 15% cap rate. Ms. Brown
was able to secure a loan for $1,540,000, and an equity investor agreed to invest the remaining
$660,000 in exchange for 20% ownership in the project.

2. What is the loan-to-value ratio for this project?

3. What would the investor’s ROI be for this 5-year project if the restaurant achieved its budgeted operating
results for the year?

4. If the investor has a hurdle rate of 15%, does this project meet or exceed the investor’s requirements?
Concept Check

  1. 👍 0
  2. 👎 0
  3. 👁 99

Respond to this Question

First Name

Your Response

Similar Questions

  1. homework

    Ms. Brown estimates the following cash flow for the first five years of operations, with cash flow leveling off in year 5. Year Cash flow Year 1 $695,000 Year 2= 876,250 Year 3= 1,057,500 Year 4= 1,238,750 Year 5= 1, 420,000

    asked by Anonymous on June 9, 2010
  2. Finance/Math

    PLease help, I have a business finance class I am really ineed of help. I do not understand this at all. I have gone over and over the instructions and I am still getting it wrong. Please help. Year Cash Flow 1 $695,000 2 876,250

    asked by Courtney on July 27, 2010
  3. business

    Analyze the following scenario: Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts. Should

    asked by alaina on June 22, 2010
  4. fiance

    2. Analyze the following scenario: Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts. Should

    asked by kia on January 12, 2012
  5. finance

    I need help bad. You have been running your small business, Craft’s Boat Shop, for several years now and have been very successful.  You have come to the point where you expect sales to increase next year and want to be sure

    asked by karen on September 2, 2014
  6. FINANCE

    Tim recently invested $3,500 in a project that is promising to return 10.75 percent per year. The cash flows are expected to be as follows: End of Cash Year Flow 1 $750 2 800 3 ??? 4 950 Note that the 3rd year cash flow is

    asked by Kevin on October 22, 2009
  7. finance

    John Keene recently invested $3,500 in a project that is promising to return 10.75 percent per year. The cash flows are expected to be as follows: End of Cash Year Flow 1 $750 2 800 3 ??? 4 950 Note that the 3rd year cash flow is

    asked by Peter on October 23, 2009
  8. Finance

    The Star Restaurant Company owns and operates Chinese restaurants throughout the northwestern United States. Paris Brown, vice president of development, has been analyzing a new metropolitan market for expansion opportunities. The

    asked by Jim on October 26, 2010
  9. accounting

    Assets Cash (Net Effect) $35,000 20,000 +15,000 A/R 33,000 14,000 +19,000 Merchandise Inventory 27,000 20,000 +7,000 PPE 60,000 78,000 -18,000 Accumulated Depreciation (29,000) (24,000) ? Liabilities and Stockholder’s Equity

    asked by Lusine on August 8, 2008
  10. Accounting

    The Harding Co. in its first year earned $39,000 in revenues and received $33,000 cash from customers. They incurred expenses $22,000, but had not paid $2,250 of them at year-end. Harden also prepaid $3,750 cash for expenses to be

    asked by Roberta on May 21, 2013

More Similar Questions