$22$

$1$ point

A company is considering opening a new store. The company's WACC $($weighted average cost of capital$)$ is $14\%,$ so this will be the required rate of return for this expansion. They also would like a $31-$month payback period so that capital will become available for other projects. They are subject to a $26\%$ tax rate. Opening the store will require fixtures, etc, which will cost $$1257572$ before the store can begin operating. These will be depreciated straightline over $5$ years assuming a $7\%$ salvage value. The salvage amount will also be included as part of the terminal value, representing the amount recaptured at the end of year $5.$ There will be no tax effect in the salvage value because the book value is expected to be $7\%$ of the historical cost at the end of year $5.$ There will be a need for $$13510$ for net working capital before the store opens, and net working capital will grow equally each year through year $4.$ At the end of year $5,$ the total net working capital will be $$60000.$ This amount will be released in the final year as part of the terminal value.

Sales for each year are forecasted to be:

Year $1$: $$428,061$

Year $2$: $$935,167$

Year $3$:$$1,483,951$

Year $4$:$$2,100,000$

Year $5$: $$2,100,000$

Cash operating costs will be $61\%$ of revenue for each year.

What is the net present value of this proposal?

Enter your answer as a monetary amount rounded to four decimal places, but without the currency symbol. For example, if your answer is $$90\mathrm{.}1234,$ enter $90\mathrm{.}1234.$ If you answer is less than zero, enter a negative value, like this: ${90\mathrm{.}1234}_{{?}_{?}}$