Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. (ignore income taxes in this problem.) betty is co

(Ignore income taxes in this problem.) Betty is considering opening a craft store. She would...

80.2K

Verified Solution

Question

Accounting

(Ignore income taxes in this problem.) Betty is considering opening a craft store. She would need $60,000 to remodel and furnish the store and another $30,000 for inventories and other working capital needs. Rent on the building used by the business will be $10,000 per year. Betty estimates that the annual cash inflow from the business will amount to be $44,000. In addition to building rent, other annual cash outflows for operating costs will amount to $17,000. Betty plans to operate the business for only seven years. She estimates that the furnishings could be sold at that time for about $2,000. Betty requires a 5% return on this investment.

Required:

What is the net present value of this investment opportunity?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students