Your friend would like some insights on how to evaluate newopportunities and thinks you could use a reality check.  Thus, she presents some data and asks forrecommendations. She has $500,000 in funds to use. Looking at herbusiness, you discover the following opportunities: option 1: Renovate her building at a cost of $500,000. Thissaves 10,000 gallons of fuel per year. Fuel currently costs $5.00per gallon. She thinks this renovation will showcase her greenbuilding skills and will lead to increased sales of $100,000 peryear for the next two years. Planning horizon is five years. option 2: Lend another entrepreneur $380,000. This person, whoshe met at a local entrepreneur center event, promises to doubleher $380,000 in 2 years. This entrepreneur has a good track recordon recent projects. option 3: Repay her car loan for her recently acquired Jaguar.She borrowed $120, 000 for 5 years at 3.9% interest to buy this carand has not yet made a payment. She can sell this car for $107,000today. So, your friend would like some pre-tax advice (thatmeans do not consider taxes or depreciation) on whatand how to decide. You can also ignore inflation in yourcalculations. Again, she has $500,000 to use in this set ofdecisions. Make a recommendation that is supported by yourcalculations. Explain your strategy in detail. Note: consider all possible alternatives using available$500,000 and state your recommendation for each alternative . . .

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