Question: A store will cost $800,000 to open. Variable costs will be 53% of sales and fixed costs are $170,000 per year. The investment costs will

 A store will cost $800,000 to open. Variable costs will be

A store will cost $800,000 to open. Variable costs will be 53% of sales and fixed costs are $170,000 per year. The investment costs will be depreciated straight-line over the 5 year life of the store to a salvage value of zero. The opportunity cost of capital 8% and the tax rate is 40%. Find the operating cash flow if sales revenue is $900,000 per year. Enter your response below. Correct response: 215,8001 Click "Verify" to proceed to the next part of the question. Using an operating cash flow of 215,800 , calculate the Net Present Value. Should the store be opened? Enter your response for net present value below. Correct response: 61,626.83100 NOT open store open store Correct response: open store Click "Verify" to proceed

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