A store will cost $875,000 to open. Variable costs will be 35% of sales and fixed costs are $190,000 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 is 6% and the tax rate is 25%.

Find the operating cash flow each year if sales revenue is $1,000,000 per year.

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

Enter your response for net present value below.