Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 130000 400000 400000 320000 Cost of Goods Sold 65000 200000 200000 160000 Gross Profit 65000 200000 200000 160000 Selling, General and Admin 6000 6000 6000 6000 Depreciation 79000 79000 79000 79000 EBIT 20000 115000 115000 75000 Income tax (35 ) 7000 40250 40250 26250 Incremental Earnings 27000 74750 74750 48750 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 8 , by using the data in the table above, calculate the net present value (NPV) of this project

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Question: Year 0 Year 1 Year 2 Year 3 Year 4 Revenue 130000 400000 400000 320000 Cost of Goods Sold -65000 -200000 -200000 160000 Gross Profit

	Year 0	Year 1	Year 2	Year 3	Year 4
Revenue		130000	400000	400000	320000
Cost of Goods Sold		-65000	-200000	-200000	160000
Gross Profit		65000	200000	200000	160000
Selling, General and Admin		-6000	-6000	-6000	-6000
Depreciation		-79000	-79000	-79000	-79000
EBIT		-20000	115000	115000	75000
Income tax (35%)		7000	-40250	-40250	-26250
Incremental Earnings		-27000	74750	74750	48750

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 8%, by using the data in the table above, calculate the net present value (NPV) of this project.

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