FINANCE-Establishing and operating a consulting service expecting to service long-term growth.

QUESTION

Investment 1. Establishing and operating a consulting service expecting to service long-term growth.Investment 2. Establishing and operating a small fashion store expecting to profit from a passing fad.Investment 3. Invest into a portfolio of preferred stocks paying a fixed annual income.Investment 4. Establishing and operating a fast food franchise.All the projects have the same initial outlay of $50,000 except for the franchise option requiring an initial outlay of $500,000. The cash flows from each project are as follows: YearConsulting ServiceFashion StorePreferred StockFranchiseOutlay$50,000.00$50,000.00$50,000.00$500,000.001$20,000.00$40,000.00$15,000.00$100,000.002$30,000.00$60,000.00$15,000.00$350,000.003$60,000.00$80,000.00$15,000.00$350,000.004$80,000.00$600,000.00$15,000.00$300,000.005$150,000.00$250,000.00$15,000.00$300,000.006$400,000.00$20,000.00$15,000.00$280,000.00Discount Rate10%20%20%20%

ANSWER:

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