Question
You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $327,000 and operating expenses of $163,500. The
You are considering opening another restaurant in the TexasBurgers chain. The new restaurant will have annual revenue of $327,000 and operating expenses of $163,500. The annual depreciation and amortization for the assets used in the restaurant will equal $54,500. An annual capital expenditure of $10,500 will be required to offset wear-and-tear on the assets used in the restaurant, but no additions to working capital will be required. The marginal tax rate will be 40 percent. Calculate the incremental annual after-tax free cash flow for the project.
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