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Question 5 2 pts Dairy King is considering opening a new store. The store sales in expected to be $200,000 per year for three years.

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Question 5 2 pts Dairy King is considering opening a new store. The store sales in expected to be $200,000 per year for three years. Labor, marketing, and rent is expected to cost $130,000 per year, also for three years. The store needs $21,000 today on furniture and kitchen equipment (capex), depreciated evenly over 3 years, with the first depreciation happening in 1 year. The store also needs to spend $10,000 immediately for a kitchen full of basic ingredients (inventory). In years 1 and 2, the store adds $1,000 more each year (so inventory will be $11,000 at the end of year 1). The store will close in 3 years. Instead of adding to the store uses inventory during year 3 so that the day the store closes, no ingredient is left in inventory. The tax rate is 30%, the discount rate is 11.2%per year, and inflation is 1%per year. What is the free cash flow for year 1? Question 6 2 pts Using information provided in question 5, what is the free cash flow for year 3? Question 7 2 pts Using information provided in question 5, what is the NPV of this store? Question 5 2 pts Dairy King is considering opening a new store. The store sales in expected to be $200,000 per year for three years. Labor, marketing, and rent is expected to cost $130,000 per year, also for three years. The store needs $21,000 today on furniture and kitchen equipment (capex), depreciated evenly over 3 years, with the first depreciation happening in 1 year. The store also needs to spend $10,000 immediately for a kitchen full of basic ingredients (inventory). In years 1 and 2, the store adds $1,000 more each year (so inventory will be $11,000 at the end of year 1). The store will close in 3 years. Instead of adding to the store uses inventory during year 3 so that the day the store closes, no ingredient is left in inventory. The tax rate is 30%, the discount rate is 11.2%per year, and inflation is 1%per year. What is the free cash flow for year 1? Question 6 2 pts Using information provided in question 5, what is the free cash flow for year 3? Question 7 2 pts Using information provided in question 5, what is the NPV of this store

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