renovation (assume cash outflow for the renovation occurs at time 0). The renovation expense falls into...

Transcribed Image Text:

renovation (assume cash outflow for the renovation occurs at time 0). The renovation expense falls into the 10-year depreciable life. Assuming the renovation starts in January, 2021, the revenue from operating the coffee shop over the remaining six months of 2021 is expected to equal $140,000. Revenue in 2022 is expected to equal $340,000 and revenue in 2023 is expected to equal $460,000. The expected annual growth In revenue is 10%/year from 2024 to 2028 and then revenue is expected to increase by 3% per year after 2028. The expected operating margin (excluding depreciation expense) is 30%, and the required working Capital will be 5% of revenue. renovation (assume cash outflow for the renovation occurs at time 0). The renovation expense falls into the 10-year depreciable life. Assuming the renovation starts in January, 2021, the revenue from operating the coffee shop over the remaining six months of 2021 is expected to equal $140,000. Revenue in 2022 is expected to equal $340,000 and revenue in 2023 is expected to equal $460,000. The expected annual growth In revenue is 10%/year from 2024 to 2028 and then revenue is expected to increase by 3% per year after 2028. The expected operating margin (excluding depreciation expense) is 30%, and the required working Capital will be 5% of revenue.