A store will cost $1,000,000 to open. Variable costs will be 42% of sales and fixed costs are $100,000 per year. The investment costs will be depreciated straight-line over the 6 year life of the store to a salvage value of zero. The opportunity cost of capital is 11% and the tax rate is 35%.

Find the operating cash flow each year if sales revenue is $600,000 per year.

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

Find the net present value break-even level of sales revenue