Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PL pls answer alll!!!!! You have recently created an app. This app is meant to fill a small, but important, niche in the dog grooming
PL
pls answer alll!!!!!
You have recently created an app. This app is meant to fill a small, but important, niche in the dog grooming space. Specifically, your app helps lower income dog owners find mobile groomers that can come to them. You have created an MVP (minimum viable product) and started to generate revenue. You have figured out that you can charge each user $5 per month. You currently have 500 users. Your costs of good sold are $1 per user. The firm's tax rate is 21%. You had to buy two machines to handle the sever load. Those machines cost a total of $3,500. In addition, you just bought some office furniture for a total of $1,000. All of these costs represent net capital spending and can all be depreciated as MACRS 3-year property classes. In addition, the firm will require increasing NWC by $900 initially. Your estimate for users is as follows: Year 1: 1600; Year 2: 2750; Year 3: 3800; Year 4: 4,000; Year 5: 4,500. | You plan to run the company for five years. At the completion of this time period, you think the machines will worth $1,200, but the office furniture will be worthless. You can recover 90% of the initial increase in NWC at that time. The firm's "k" is assumed to be 10%. Your goal today is to value the company as of the data assumed above. a. What are the NCFs each year for the firm? (10 pts) Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 b. What is the NPV (the value) for the firm? (10 pts) NPV: C. What is the internal rate of return for the firm? (10 pts) PBStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started