Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone please help me with practice questions. I keep messing it up somewhere along the way. A store will cost $900,000 to open. Variable

image text in transcribedimage text in transcribed

Can someone please help me with practice questions. I keep messing it up somewhere along the way.

image text in transcribedimage text in transcribed
A store will cost $900,000 to open. Variable costs will be 60% of sales and fixed costs are $250,000 per year. The investment costs will be depreciated straight-line over the 8 year life of the store to a salvage value of zero. The opportunity cost of capital is 13% and the tax rate is 35%. Find the operating cash flow each year if sales revenue is $600,000 per year. Enter your response below. 32875 0 Correct response: 32.815110 Click "Verify" to proceed to the next part of the question. 0 Using an operating cash flow of 32,875, calculate the Net Present Value. Should the store be opened? Enter your response for net present value below. -742240.43 0 Correct response: -142 , 240 . 431100 Open store ; Do NOT open store 0 Correct response: DO "01' open store Find the net present value break-even level of sales revenue Enter your response below. Number Click "Verify" to proceed

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

Personal Financial Planning

Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk

14th edition

978-1305887725, 1305887727, 1305636619, 978-1305636613

More Books

Students also viewed these Finance questions

Question

What is a lifestyle entrepreneur?

Answered: 1 week ago

Question

Find three applications of brainstorming on the Internet.

Answered: 1 week ago