A store will cost $725,000 to open. Variable costs will be 57% of sales and fixed costs are $110,000 per year. The investment costs will be depreciated straight-line over the 10 year life of the store to a salvage value of zero. The opportunity cost of capital is 13% and the tax rate is 35%.

Find the operating cash flow each year if sales revenue is $800,000 per year.

Enter your response below.

: 177,47510

Click "Verify" to proceed to the next part of the question.

Using an operating cash flow of 177,475, calculate the Net Present Value. Should the store be opened?

Enter your response for net present value below.

: 238,022.56100

Open store

Do NOT open store

: Open store

Click "Verify" to proceed to the next part of the question.

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

Enter your response below.