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1 . You have been asked to estimate the expected earnings on a new store for Abercombie and Fitch. The firm currently has 2 3

1. You have been asked to estimate the expected earnings on a new store for Abercombie and Fitch. The firm currently has 235 stores open and total revenues of $4.7 billion las year. The cost of goods sold, not including depreciation, is 60% of revenues. The firm will have to make an initial investment of $10 million in the new store, and the store will be depreciated straight line over 10 years to a salvage value of zero. In addition, the firm has selling and advertising expenses of $470 million that are allocated equally to existing stores. If the tax rate is 40% and the expected inflation rate is 3%, estimate the after-tax operatinf income on a new each year for the next five year.
Hello! the answer in the platform is not correct, it will be awesome if someone help me with the formulas. Thank You in advance.

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