Finance Project

Finance Project - investment there are many other risks in...

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The subway restaurant that would be the best investment would be the small subway restaurant it have the fastest Cumulative cash flow for payback at 1.41 years compared to the medium store at 2.19 years and the large store at 2.97 years to payback. The small store also has a NPV of $347,900 and a IRR of 79.41%, the moderate store has a NPV of $147,409 and IRR of 35.00%, the large store has a NPV $250,815 and IRR of 38.46%. The IRR is much higher than both of the other stores determining that it has a much higher yield on investment, Also the it has the ability to payback much faster than either of the other stores give you a faster chance to make money when you get the money you invested back much faster. The net present value is a standard method for the financial appraisal of long-term projects the small store has the highest net present value making it worth the most out of the three. Although this seems like a keen
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Unformatted text preview: investment there are many other risks in owning or even investing in a restaurant such as this subway. The restaurant business is “One of the riskiest business ventures to undertake and that more restaurants fail and close than any other type of business.” there are training courses in restaurant management available but, there is no substitute for on the job experience and that can mean starting at the bottom and working your way up which may take several years. They are alternatives, that you can also limit your risk by buying into other people's established restaurants or on a higher level still, buying shares on the stock market in a restaurant franchise like a subway. I feel the rate of return that I would need to be compensated for owning a subway is 17%. Please include your personal rate of return you feel you would need to be compensated for owning a subway....
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