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wwhat npv and irr for those - You will keep the bakery open for 12 year. - To start up, you have to invest $150,000
wwhat npv and irr for those
- You will keep the bakery open for 12 year. - To start up, you have to invest $150,000 for your fixed assets. - Revenue in first year is $120,000, and should grow by 3% per year. - Rent of the storefront costs $35,000 per year, and should grow by 2% per year. - COGS (food supplies, kitchen equipment, silvers, etc) cost $30,000 per year. - Employee salaries cost $40,000 per year. - Utilities cost $5,000 per year. - You will depreciate your fixed assets using a straight-line depreciation method. Assuming all your fixed assets have a usable life of 15 years and a salvage valing $8,000. - After 12 years in business, you plan to leave the business and sell your fixed assets based on its salvage value. - Income tax rate is 30%. - Capital gains tax rate is 15% (1) If you require at least 10% return, what's NPV and IRR of this investmentStep by Step Solution
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