Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A store will cost $900,000 to open. Variable costs will be 59% of sales and fixed costs are $100,000 per year. The investment costs will

image text in transcribed

A store will cost $900,000 to open. Variable costs will be 59% of sales and fixed costs are $100,000 per year. The investment costs will be depreciated straight-line over the 17 year life of the store to a salvage value of zero. The opportunity cost of capital is 8% and the tax rate is 25%. Find the operating cash flow if sales revenue is $1,000,000 per year. Enter your response below. Correct response: 245,735.291 Click "Verify" to proceed to the next part of the question. Using an operating cash flow of 245,735.29, calculate the Net Present Value. Should the store be opened? Enter your response for net present value below

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Crypto Spotlight Series Loopring

Authors: Nott U.r. Keys

1st Edition

979-8854247665

More Books

Students also viewed these Finance questions

Question

Explain exothermic and endothermic reactions with examples

Answered: 1 week ago

Question

Write a short note on rancidity and corrosiveness.

Answered: 1 week ago