Can you explain me how operating expenses ($ 238.272 ) had been calculated ? I need more details.

The following Income Statement comes from the fiscal year 2020 of DPC college (all amounts in $).

Revenues from tuition fees 440,000

Minus Cost of services provided (70,116)

Gross profit 369,884

Minus Operating expenses (303,600)

Profit before taxes 66,284

So far, DPC has been renting its facilities (building, equipment etc.) for $60,000 annually. This expense is included in Operating expenses above. DPCs owner could acquire now, i.e. 01/01/2021, all equipment (instead of renting it) for $600,000. Further assume the following:

1. Useful life of building and equipment = 50 years; Salvage Value = 100000; Straight-line depreciation
2. Corporate tax rate = 30%
3. Net working capital = 20% of next years revenues
4. Revenues are expected to increase 3% annually for the next 5 years
5. Costs and expenses except for depreciation and interest (if any) are expected to increase by 2% annually for the next 5 years
6. DPC would apply a zero-payout dividend policy the next 5 years, i.e. retain all its earnings (if any)
7. The acquisition would be financed as follows:
   1. $500,000 with a new bond with 10 years maturity and 5% annual coupon rate. Similar bonds are discounted at 6% annually
   2. The rest with new common stocks. DPCs unlevered beta has been estimated 0.5. Floatation costs are 1% of stock price. Market annual return is 8%. Risk-free rate is 2%.
8. The investment could be sold as it is for $700,000 after 5 years. As it is means that the buyer would pay $700,000 to DPCs owner and receive all common stocks. Therefore, the $700,000 amount represents the net proceeds from the sale of investment. Any change in working capital because of the sale of investment is included in the $700,000 amount, i.e. there would be no additional investment or release from working capital at the end of year 5.

Particulars Year o Year 1 Year 2 Year 3 Year 4 Year 5 Revenues from tuition fees 453200 466796 480799.9 495223.9 510080.6 Less: Cost of services provided -71518.32 -72948.7 -74407.7 -75895.8 -77413.73 Gross Profit 381681.68 393847.3 406392.2419328.1 432666.9 Less: Operating Expense -238272 -243037 -247898 -252856 -257913.3 Less: Depreciation -10000 -10000 -10000 -10000 -10000 Profit before taxes 143409.68 150809.9 158494 166471.9 174753.6 Less: Taxes at 30% -43022.9 -45243 -47548.2 -49941.6-52426.08 Profit after taxes 100386.78 105566.9 110945.8 116530.3 122327.5 add: Depreciation 10000 10000 10000 10000 10000 add: Sale value 700000 Cash flow after taxes -601010 110386.78 115566.9 120945.8 126530.3 832327.5 PVF (5.16%) 1 0.9509394 0.904286 0.859921 0.817733 0.777614 Discounted Cash flows -601010 104971.14 104505.5 104003.9 103468 647229.8 NPV = 463168.32 IRR = 15.95%