Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A garage is installing a new bubblewash car wash. It will promote the car wash as a fun activity for the family, and it is
A garage is installing a new "bubblewash" car wash. It will promote the car wash as a fun activity for the family, and it is expected that the novelty of this approach will boost sales in the medium term.
If the cost of capital is 10%, what is the net present value (NPV) of this project?
@{; } Year 1130,000 65,000 Year 2420,000@{; }210,000 Year 3420,000@{ ; }210,000 Year 4330,000@{ ; }165,000 Gross Profit Selling, General and Admin 65,000@{ : }6,200@{ : - }77,000 210,000@{ ; }6,200@{; }77,000 210,000@{; }6,200@{; }77,000 165,000@{:}6,200@{ ; }77,000 Depreciation EBIT - 18,200@{; }3,640 126,800@{ ;-}25,360 126,800@{ ; -}25,360 81,800@{ ; - }16,360 Income tax (20%) Incremental Earnings - 280,000 - 14,560@{;; -5,000} 101,440@{;; -5,000} 101,440@{;; -5,000} 65,440@{;; -5,000} Capital Purchases Changes to NWCStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started