Homework
Access Part VI of the IG009 Assessment Scenarios document. Dr. Lucy Zang, a noted local podiatrist, plans to open a retail shoe store specializing in hard-to-find footwear for people with feet problems, such as bunions, flat feet, mallet toes, and diabetic feet. She has asked you to help her figure out what sales need to be each month to keep the store open, and has given you some basic numbers to work with. Using the estimates provided in Part VI of the Assessment Scenarios document, calculate the amount of sales the Happy Feet store must do each month to break even.
Part II: Making Investment Decisions Using NPV, ARR, IRR, and Payback
Investments
Investment A
Investment B
Required Investment
$50,000
$150,000
Annual Cash Flows
20,000
56,000
Annual Net Income
8,000
34,000
Project Life
5 years
5 years
Cost of Capital
10%
10%
