Foodelicious Corp

question 55

Multiple Choice

Foodelicious Corp. is evaluating whether it should take over the lease of an ethnic restaurant in Manhattan. The current owner had originally signed a 25-year lease, of which 16 years still remain. The restaurant has been growing steadily at a 7 percent growth for the last several years. Foodelicious Corp. expects the restaurant to continue to grow at the same rate for the remaining lease term. Last year, the restaurant brought in net cash flows of $310,000. If the firm evaluates similar investments at 15 percent, what is the present value of this investment? (Round to the nearest dollar.)

• A) $2,966,350
• B) $2,838,182
• C) $3,109,460
• D) $2,709,124

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Definitions:

Government

The system or group of people governing an organized community, often a state, including its institutions, laws, and policies.

Plymouth Colony

An early settlement established in 1620 by English Puritans in present-day Massachusetts, known for the celebrated Thanksgiving feast.

Mayflower Compact

An agreement reached by the Pilgrims on the Mayflower in 1620, establishing self-governance in Plymouth Colony.

Civil Government

The branch of government concerned with the administration of the state, including the implementation and enforcement of laws and the management of public affairs.