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Suppose that Oconee Gymnastics Center decides to open a new branch in the next county. The after-tax cash flows for the new center are expected
Suppose that Oconee Gymnastics Center decides to open a new branch in the next county. The after-tax cash flows for the new center are expected to be $15,000.00 per month. However, the new center will cause some gymnasts at the original location to switch to the new branch creating a negative side effect. The lost membership fees from the original location are estimated at $2,000.00 per month. The after-tax operating margin on memberships is 60.00%. The cost of the new branch will be $500,000 today. The gymnastics center wants to evaluate the project using a 10-year time horizon with a 12% annual rte (use monthly compounding). What is the NPV of the project
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