Question
i am trying to work out NPV and IRR of the following hypotheitcal situation over 10 years with a DF 12%. - Store will closed
i am trying to work out NPV and IRR of the following hypotheitcal situation over 10 years with a DF 12%.
- Store will closed for refurbishment start of september ready to open start of december.
- Refurb cost 710,000 depreciated over 10 years.
- Additional store counter fitting cost 30,000
will cease to sell product lines with a usual revenue of
Month | Typical sales |
January | 41,650 |
February | 57,850 |
March | 42,875 |
April | 44,100 |
May | 45,325 |
June | 46,550 |
July | 47,775 |
August | 46,550 |
September | 45,325 |
October | 42,875 |
November | 45,815 |
December | 47,775 |
generating 50% profit margin. This line has inflation rate of 1.94%
-stop of product lines generates saving of 145,800 per year at 5% inflation
-Commence new product line generating revenue of 2,311 per week with 3.52% inflation. 75% profit margin
-Have retail-in-retail concession generating rent of store area of 180,000 per year at 5% inflation
-Nearby store selling same product lines causes cannibalisation of sales of 1,000 per week
- tax rate 20% paid in the year to which it relates
Year 1 is trading for 39 weeks not 52. year 2 resumes to 52 weeks
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