Question: Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 100000 440000 440000 340000 Cost of Goods Sold -50000 -220000 -220000 170000 Gross Profit
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | |
| Revenue | 100000 | 440000 | 440000 | 340000 | |
| Cost of Goods Sold |
| -50000 | -220000 | -220000 | 170000 |
| Gross Profit |
| 50000 | 220000 | 220000 | 170000 |
| Selling, General and Admin |
| -6400 | -6400 | -6400 | -6400 |
| Depreciation |
| -76000 | -76000 | -76000 | -76000 |
| EBIT | -32400 | 137600 | 137600 | 87600 | |
| Income tax (35%) |
| 11340 | -48160 | -48160 | -30660 |
| Incremental Earnings | -43740 | 89440 | 89440 | 56940 | |
|
|
| ||||
| Capital Purchaes | -280,000 |
| |||
| Change to NWC | -5,000 | -5,000 | -5,000 | -5,000 |
A garage is installing a new "bubble-wash" car wash. It will promote the car wash as a fun activity for the family, and it is expected that the novelty of this approach will boost sales in the medium term. If the cost of capital is
9%, by using the data in the table above, calculate the net present value (NPV) of this project
A.
$126,971
B.
$120,622
C.
$114,274
D.
139,668
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