Question: A store will cost $625,000 to open. Variable costs will be 40% of sales and fixed costs are $190,000 per year. The investment costs will

A store will cost $625,000 to open. Variable costs will be 40% of sales and fixed costs are $190,000 per year. The investment costs will be depreciated straight-line over the 12 year life of the store to a salvage value of zero. The opportunity cost of capital is 9% and the tax rate is 40%.

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

ans: 212,833.3310

Using an operating cash flow of 212,833.33, calculate the Net Present Value. Should the store be opened?

Enter your response for net present value below. ans: 899,041.03100

Do NOT open store

Open store

ans Open store

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

Enter your response below.

How to do the last one? thx!

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