A restaurant is for sale for $200,000. It is estimated that the restaurant will earn $20,000 a year for the next 15 years. At the end of 15 years, it is estimated that the restaurant will sell for $350,000. Which of the following would be MOST LIKELY to occur if the investor’s required rate of return is 15 percent?
Investor would pursue the project.
Investor would not pursue the project.
Investor would pursue the project if the holding period were longer than 15 years.
Not enough information provided.