Question
Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 120000 440000 440000 320000 Cost of Goods Sold -60000 -220000 -220000 160000 Gross Profit
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Revenue | 120000 | 440000 | 440000 | 320000 | |
| Cost of Goods Sold |
| -60000 | -220000 | -220000 | 160000 |
| Gross Profit |
| 60000 | 220000 | 220000 | 160000 |
| Selling, General and Admin |
| -6400 | -6400 | -6400 | -6400 |
| Depreciation |
| -80000 | -80000 | -80000 | -80000 |
| EBIT | -26400 | 133600 | 133600 | 73600 | |
| Income tax (35%) |
| 9240 | -46760 | -46760 | -25760 |
| Incremental Earnings | -35640 | 86840 | 86840 | 47840 | |
|
|
| ||||
| 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.
A. $126,727
B. $120,391
C. $114,054
D.$139,400
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Financial Analysis With Microsoft Excel 2016
Authors: Timothy R. Mayes, Todd M. Shank
8th Edition
1337298042, 9781337298049
