Question
Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on
Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. Ignore income taxes in this problem.) The data pertaining to her investment opportunity are:
Cost of equipment $ 175,000
Working capital needed $ 185,000
Annual cash inflow from sales $ 190,000
Annual cash outflow for operating costs $ 145,000
Salvage value of equipment $ 20,000
Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the annual NET savings?
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Authors: Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Cris Riddle, Mark Salamasick, Paul J. Sobel
4th Edition
0894139878, 978-0894139871
