Question
A store will cost $1,000,000 to open. Variable costs will be 42% of sales and fixed costs are $230,000 per year. The investment costs will
A store will cost $1,000,000 to open. Variable costs will be 42% of sales and fixed costs are $230,000 per year. The investment costs will be depreciated straight-line over the 12 year life of the store to a salvage value of zero. The opportunity cost of capital is 11% and the tax rate is 25%.
Find the operating cash flow each year if sales revenue is $700,000 per year: 152,833.3310 (completed)
Using an operating cash flow of 152,833.33, calculate the Net Present Value. Should the store be opened?
Net present value: -7,751.57100 - Do NOT open store (completed)
Question: Find the net present value break-even level of sales revenue
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