Jobs R Us, Inc. Is a recruiting firm that specializes in post- college placement in the finance industry. Its clients are currently concentrated in the North-Eastern United States lt is contemplating expanding into the Mid-West and accesses the risk of the new venture to be similar to that of the existing company. Your RBS summer intern created a summary for Jobs R Us, Inc. potential in the Midwest market over the next 5 years: . Revenue is expected to be $7,500,000 ite first year and grow 8% per year for the next 4 years * Variable cost is expected to be 45% of revenue Fixed cost (including depreciation) is expected to be $1,250,000 of revenue each year Depreciation expense is expected to be $76,000 each year .Maintenance capex is expected to be $150,000 each year : Change in Net working capital is expected to be $100,000 in year 1, growing at the same percentag as revene thereafter Taxes are 40%. Initial investment today is estimated to be $2,500,000 Aher tax cost of capital is 12% * What is the NPV? (answer in millions. round to 1 decimal)

Answer rating: 100% (QA)

To calculate the Net Present Value NPV of the expansion project for Jobs R Us Inc in the Midwest market we need to discount the projected cash flows revenues costs changes in net working capital maint... View the full answer