Question
Year 0 Year 1 Year 2 Year 3 Revenue 150000 420000 420000 300000 Cost of Goods Sold -75000 -210000 -210000 150000 Gross Profit 75000 210000
|
| Year 0 | Year 1 | Year 2 | Year 3 | |
| Revenue | 150000 | 420000 | 420000 | 300000 | |
| Cost of Goods Sold |
| -75000 | -210000 | -210000 | 150000 |
| Gross Profit |
| 75000 | 210000 | 210000 | 150000 |
| Selling, General and Admin |
| -6800 | -6800 | -6800 | -6800 |
| Depreciation |
| -78000 | -78000 | -78000 | -78000 |
| EBIT | -9800 | 125200 | 125200 | 65200 | |
| Income tax (35%) |
| 3430 | -43820 | -43820 | -22820 |
| Incremental Earnings | -13230 | 81380 | 81380 | 42380 | |
|
|
| ||||
| Capital Purchaes | -280,000 |
| |||
| Change to NWC | -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 8%,
by using the data in the table above, calculate the net present value (NPV) of this project. The last box should say year 4
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Understanding The Finance Of Welfare
Authors: Howard Glennerster
2nd Edition
1847421091, 978-1847421098
