Question: part A needed for part B A store will cost $875,000 to open. Variable costs will be 47% of sales and fixed costs are $130,000

part A needed for part B  part A needed for part B A store will cost $875,000
to open. Variable costs will be 47% of sales and fixed costs

A store will cost $875,000 to open. Variable costs will be 47% of sales and fixed costs are $130,000 per year. The investment costs will be depreciated straight-line over the year life of the store to a salvage value of zero. The opportunity cost of capital is 10% and the tax rate is 10% Find the operating cash flow each year if sales revenue is $1,000,000 per year. Enter your response below. 298,333 Correct response: 298,333.3310 Click "Verily to proceed to the next part of the question Using an operating cash flow of 298,333.33, calculate the Net Present Value. Should the store be opened? Enter your response for net present value below. Number Do NOT open store Open store Click "Verify" to proceed to the next part of the question. Section Attempt 1 of 1 Verify

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!