Question
Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 110000 450000 450000 320000 Cost of Goods Sold -55000 -225000 -225000 160000 Gross Profit
Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 110000 450000 450000 320000 Cost of Goods Sold -55000 -225000 -225000 160000 Gross Profit 55000 225000 225000 160000 Selling, General and Admin -6200 -6200 -6200 -6200 Depreciation -72000 -72000 -72000 -72000 EBIT -23200 146800 146800 81800 Income tax (35%) 8120 -51380 -51380 -28630 Incremental Earnings -31320 95420 95420 53170 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 10?%, by using the data in the table? above, calculate the net present value? (NPV) of this project.
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