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Help Year 0 Year 1 Year 2 Year 3 Year 4 Revenues 140,000 440,000 440,000 350,000 Cost of Goods Sold -70,000 220,000 220,000 175,000 Gross
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Year 0 Year 1 Year 2 Year 3 Year 4 Revenues 140,000 440,000 440,000 350,000 Cost of Goods Sold -70,000 220,000 220,000 175,000 Gross Profit 70,000 220,000 220,000 175,000 Selling, General and Admin -6400 6400 6400 6400 -75,000 75,000 75,000 75,000 Depreciation EBIT -11.400 138,600 138,600 93,600 Income tax (35%) -48,510 -48,510 -32,760 3990 -7410 Incremental Earnings 90,090 90,090 60,840 Capital Purchases -280,000 Changes to NWC -5,000 -5,000 -5,000 -5,000 A garage is installing a new "bubble-wash" car wash. It will promote the car wash as a fun activity for the family, and it is expected that the novelty of this approach will boost sales in the medium term. If the cost of capital is 10%, what is the net present value (NPV) of this project? O $150,548 O -$135,493 O $165,603 O -$143,021Step by Step Solution
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