A small commercial property is for sale near your university. Given its location, you believe a student-oriented business would be very successful there. You have researched several possibilities and come up with the following cash flow estimates (including the cost of purchasing the property). Which investment should you choose?
Project
Initial Investment
First-Year Cash Flow
Growth Rate
Cost of Capital
Book Store
$300,000
$63,000
3.0%
8%
Coffee Shop
$400,000
$80,000
Music Store
$104,000
0.0%
Electronics Store
$100,000
11%
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