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You have been observing the progressive gentrification of your city with interest. You realize that the time is ripe for you to open and run
You have been observing the progressive gentrification of your city with interest. You realize that the time is ripe for you to open and run an aerobic exercise center. You find an abandoned warehouse which will meet your needs and rents for $ year. You estimate that it will initially cost $ to renovate the place and buy Nautilius equipment for the center. You will depreciate the equipment using straightline depreciation to ZERO. You have spent $ on market research, which indicates that you can expect to get members, each paying $year You have also found five instructors you can hire for $ a year each. Your tax rate, if you start making profits, will be and you choose to use straight line depreciation on your initial investment. If your cost of capital is and you expect to retire to the Bahamas in years. You expect that you will be able to sell the equipment for in years. Estimate the net present value and internal rate of return for this investment. NPV IRR
You have been observing the progressive gentrification of your city with interest. You realize that the time is ripe for you to open and run an aerobic exercise center. You find an abandoned warehouse which will meet your needs and rents for $ year. You estimate that it will initially cost $ to renovate the place and buy Nautilius equipment for the center. You will depreciate the equipment using straightline depreciation to ZERO. You have spent $ on market research, which indicates that you can expect to get members, each paying $year You have also found five instructors you can hire for $ a year each. Your tax rate, if you start making profits, will be and you choose to use straight line depreciation on your initial investment. If your cost of capital is and you expect to retire to the Bahamas in years. You expect that you will be able to sell the equipment for in years. Estimate the net present value and internal rate of return for this investment.
NPV
IRR
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