Q2: A warehouse can be built with an initial cost of $60000, which may last for 20 years with annual revenues of $5000 and a salvage value of $30000. Calculate the rate of return on this investment. (Try i 5% and 10%).

David  is a detective in the Atlanta Police Department earning $75,000 per year.  He is also an avid cook and people rave about his cooking. David  hears of an opportunity to buy an existing restaurant  .  He needs to take $100,000 out of his brokerage truck to buy the restaurant.  The $100,000 averaged a return of 10% over the last few years.   Based on the recent history of the restaurant, he expects annual  revenues of $400,000.   He expects to spend $140,000 on food, $75,000 on employee expense, $50,000 on rent , and $25,000 for utilities each year. David is trying to decide whether to quit his job as a detective and buy the restaurant. Assuming that David is indifferent between being a detective and owning the restaurant, should David quit his job as a detective and buy the restaurant? Explain why or why not. David’s significant other reminds him that he LOVES being a detective and that he will miss being a detective if he decides to go into the restaurant business.  After…

A project has an investment of $150,000 in year 0 and an additional investment of $20,000 at the end of year Project starts producing net cash inflows of $50,000 end of years years 2-7 (years 2 to years 7? What is the internal rate of return (IRR) of this Project? A 12.00% 13.77% 14.51% 15.00% 21.13%

A grateful donor wishes to start an endowment at her alma mater that will provide scholarship money of $40,000 per year beginning now (time 0) and continue indefinitely. If the funds earn 10% per year, the amount she must donate now is closest to:a. $340,000b. $400,000c. $440,000d. $493,800