Question: A store will cost $ 7 5 0 , 0 0 0 to open. Variable costs will be 5 9 % of sales and fixed
A store will cost $ to open. Variable costs will be of sales and fixed costs are $ per year. The investment costs will be depreciated straightline over the year life of the store to a salvage value of zero. The opportunity cost of capital is and the tax rate is
Find the operating cash flow each year if sales revenue is $ per year.
Using an operating cash flow of calculate the Net Present Value. Should the store be opened?
Find the net present value breakeven level of sales revenue.
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