You are the manager of the new Westchester In - N - Out loca on , and
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Question:
You are the manager of the new Westchester InNOut locaon and you are considering adding a nd kitchen to keep up with LMU student demand. The locaons annual revenue is currently $ and this expansion will add an addional in annual revenue. The associated annual costs for running the new kitchen are $ The new kitchen will cost $ to build, it will operate for five years, aer which me it will be worthless, and it will be depreciated using the MACRs year rates. Addionally you must purchase $ in food service
machines, which have the same esmated fiveyear life with no salvage value. However, the kitchen equipment is depreciated using MACRs year rates. InNOut is subject to a tax rate and this project has a cost of capital of
a What are the periodic cash flows associated with the project?
Please provide work and show all steps using excel spreadsheet.
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