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A store will cost $1,000,000 to open. Variable costs will be 54% of sales and fixed costs are $200,000 per year. The investment costs will
A store will cost $1,000,000 to open. Variable costs will be 54% of sales and fixed costs are $200,000 per year. The investment costs will be depreciated straight-line over the 11 year life of the store to a salvage value of zero. The opportunity cost of capital is 12% and the tax rate is 40%.
Find the operating cash flow each year if sales revenue is $750,000 per year.
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