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You are the owner of a small bar, The World, and you are considering opening a bakery in a vacant area in the back of
You are the owner of a small bar, The World, and you are considering opening a bakery in a vacant area in the back of the store. You estimate that it will cost you $54,234.00 to set up the bakery and that you will generate $10,240.00 in after-tax cash flows in for the life of the store (which is expected to be 10 years.) The one concern you have is that you have limited parking, by opening the bakery you run the risk of not having enough parking for customers who enjoy your bar. You estimate that the lost sales would amount to $3,162.00 per year and that your after-tax operating margin on sales at the bar is 52.00%. If your discount rate is 14.00%, what is the NPV of opening the bakery? Answer Format: Currency: Round to: 2 decimal places
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