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QUESTION 4 (25 MARKS) You are working for an entrepreneur who owns a number of...

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QUESTION 4 (25 MARKS) You are working for an entrepreneur who owns a number of small businesses in Barcelona, Spain, as well as a small piece of property near Barcelona University, which he believes would be an ideal site for a student-oriented mini market store. His 12-year-old son, who happens to be in the office after school, says he has better idea; his father should open a lemonade stand. Your boss tells you to find the NPV and IRR for both projects, assuming a 10% discount rate. After collecting data, you present the following analysis: Year Lemonade Stand Mini Market Store 0 1 2 3 - 1,000 850 850 850 850 76.2% 1,694 - 1,000,000 372,000 372,000 372,000 372,000 18.0% 179,190 4 IRR NPV Assuming the project is mutually exclusive, which should be selected? Explain your argument

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