Gorgeous George is evaluating a three-year investment in an oil-change franchise, which costs $25,000 paid up front. Projected net operating cash flows are $40,000 per year. If Gorgeous George buys shares instead of the franchise, he expects an annual return of 15%. Which is true?
A) The future value of the franchise is $95,000
B) The net present value of the franchise is $91,329
C) The future value of the franchise is $138,900
D) The net present value of the franchise is $66,329
E) None of the above
Correct Answer:
Verified
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