John Wiggins is considering the purchase of a small restaurant. The purchase price listed by...
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Accounting
John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is 5800,000 . John has used past financial information to estimate that the net cash flows (cash inflows less cash outflows) generated by the restaurant would be as follows: If purchased, the restaurant would be held for 10 years and then sold for an estimated $700.000. Required: Assumine that John desires a 108 rate of return on this invesiment, should the restaurant be porchased? (Asume that all cath floss occur at the end of the year.)
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