A store will cost $1,000,000 to open. Variable costs will be 42% of sales and fixed costs are $220,000 per year. The investment costs will be depreciated straight-line over the 14 year life of the store to a salvage value of zero. The opportunity cost of capital is 12% and the tax rate is 30%.

Find the operating cash flow each year if sales revenue is $850,000 per year.

= 212528.57

Using an operating cash flow of 212,528.57, calculate the Net Present Value. Should the store be opened?

= 408675.12 / open store

****find the net present value break-even level of sales revenue****