A store will cost $$950,000$ to open. Variable costs will be $37\%$ of sales and fixed costs are $$240,000$ per year. The investment costs will be depreciated straight$-$line over the $8$ year life of the store to a salvage value of zero. The opportunity cost of capital is $5\%$ and the tax rate is $25\%.$

Find the operating cash flow each year if sales revenue is $$900,000$ per year.

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$274937\mathrm{.}50$

Correct response: $274,937\mathrm{.}5\backslash$pm $10$

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Using an operating cash flow of $274,937\mathrm{.}5,$ calculate the Net Present Value. Should the store be opened?

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$826987\mathrm{.}79$

Correct response: $826,979\mathrm{.}56\backslash$pm $100$

Open store Do NOT open store

Correct response: Open store

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

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$$

Number

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