Olafs Pizza Company is considering adding more dining space to its already successful restaurant. The...
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Olafs Pizza Company is considering adding more dining space to its already successful restaurant. The owner, Kristoff, has determined that the new dining space will add $100,000 per year in additional sales. The expenses on the expansion will be 45% of the new sales. As part of the expansion, additional cooking equipment will be purchased with an installed cost of $40,000. The equipment will be depreciated using a 7-year MACRS schedule. The tax rate facing the firm is 35%.
What is the project cash flow for year 1 of the project?
Question 11 options:
|
| $27,500.45 |
|
| $37,750.60 |
|
| $40.500.45 |
|
| $31,250.60 |
|
| $41,000.60 |
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