Finance

Q1. You are considering opening another restaurant in the Pizza chain. The new restaurant will have annual revenue of $200,000 and operating expenses of $80,000. Th e annual depreciation and amortization for the assets used in the restaurant will equal $20,000. An annual capital expenditure of $10,000 will be required to offset wear and tear on the assets used in the restaurant, but no additions to working capital will be required. Th e marginal tax rate will be 30 percent. Calculate the incremental annual after-tax free cash flow for the project.

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