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Your firm owns a Volkswagen dealership, and you are considering entering into a 5 - year agreement to also sell Audi A 4 s .
Your firm owns a Volkswagen dealership, and you are considering entering into a year agreement to also sell Audi As The car would cost $ and you believe that you can sell Audis per year at an average price of $ You would have to hire new sales people that you would pay $ per year each year plus of the revenue they generate. Audi would require that you invest $depreciable straight line over years in Audirelated signage, equipment and furniture to place in your dealership. You would also be required to invest in cars to keep in inventory over the life of the project. After years, you can recover your investment in working capital, and the unneeded equipment would have a market value of $assuming no tax is applied on this sale Your firm requires a return on all new investments and the tax rate is Show that the NPV after years is around $
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