Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribedPL

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) PB

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate And Project Finance Modeling Theory And Practice

Authors: Edward Bodmer

1st Edition

1118854365, 9781118854365

More Books

Students also viewed these Finance questions

Question

coteon twailet price? poosid your answer to the near tot cent

Answered: 1 week ago

Question

Explain the pattern of trade union membership and union structure

Answered: 1 week ago