Question: You are considering opening a car wash. The initial cost will be $242,595, and it will earn an EBIT of $21,228 per year for the

You are considering opening a car wash. The initial cost will be $242,595, and it will earn an EBIT of $21,228 per year for the next 25 years. At the end of that time, it can be sold for a salvage value of $47,619 (which counts as taxable income). The appropriate discount rate for a car wash if you pay cash for everything is 13.0%. You can borrow $64,072 to help cover the setup costs at 6.1%, making yearly interest payments, and repaying the principal at maturity. Your tax rate is 22%. What is the NPV of opening this car wash, using the APV method?

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