A store will cost $1,000,000 to open. Variable costs will be 59% of sales and fixed costs are $130,000 per year. The investment costs will be depreciated straight-line over the 16 year life of the store to a salvage value of zero. The opportunity cost of capital is 5% and the tax rate is 25%.

Using an operating cash flow of 118,000, calculate the Net Present Value. Should the store be opened?

Enter your response for net present value below.

open store

NOT open store

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