The following table shows a potential investment which John Smith, the owner of Johnny's Garage, is...

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The following table shows a potential investment which John Smith, the owner of Johnny's Garage, is considering. Based on this information, and using the NPV criteria, should Johnny proceed with the investment? Why or why not? Show your work completely. Johnny's Garage Alignment Machine Assumptions Cost Expected Life Projected Average Sales Price Projected Number of Sales per day Projected Daily Revenue Projected Direct Labor Costs per day Additional Monthly General and Administrative Expenses Monthly Equipment Lease Payment $35,000 5 years $75 6 $450 $200 $700 $550 The following table shows a potential investment which John Smith, the owner of Johnny's Garage, is considering. Based on this information, and using the NPV criteria, should Johnny proceed with the investment? Why or why not? Show your work completely. Johnny's Garage Alignment Machine Assumptions Cost Expected Life Projected Average Sales Price Projected Number of Sales per day Projected Daily Revenue Projected Direct Labor Costs per day Additional Monthly General and Administrative Expenses Monthly Equipment Lease Payment $35,000 5 years $75 6 $450 $200 $700 $550

Answer rating: 100% (QA)

Net Present Value NPV Net Present Value is the value of all future cash flows inflows and outflows o... View the full answer