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Q5 Revenues Cost of Goods Sold Gross Profit Selling, General and Admin Depreciation EBIT Income tax (35%) Incremental Earnings Capital Purchases Changes to NWC Year
Q5 Revenues Cost of Goods Sold Gross Profit Selling, General and Admin Depreciation EBIT Income tax (35%) Incremental Earnings Capital Purchases Changes to NWC Year 0 -280,0 00 Year 1 140,00 0 Year 2 440,00 0 -70,00 220,00 0 0 Year 3 440,00 0 -11,40 0 3990 220,00 0 70,000 220,00 220,00 175,00 0 0 0 -6400 6400 6400 6400 Year 4 350,00 0 -5,00 75,000 75,000 75,000 0 175,00 0 -48,51 -48,51 138,60 138,60 93,600 0 0 0 0 -32,76 0 -7410 90,090 90,090 60,840 -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? Show all calculations.
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