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You have inherited $75,000 unexpectedly from your Uncle. You have determined that you have two different investment opportunities available to you. The money can be placed on deposit at terest rate you can earn is 6% compo unded annually. Alternatively, you can nvest in a business opportunity with Cafe Creme and receive the following cash flows: Year 1 5,000 Years 2-5 $12,500 each yea $15,000 each year Required Calculate the present value of the investment at the bank and the business opportunity with Cafe Creme using a discount rate of 6% per annum (5 marks Based on your anal lysis, which the better opportunity? Explain induding any additional financial considerations. (3 marks Explain why 6% would be an appropriate discount rate to calculate the present value of the Cafe Crbme business opportunity?


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