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You run a restaurant and are considering adding Indian cuisine to the regular burger menu....

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Accounting

You run a restaurant and are considering adding Indian cuisine to the regular burger menu. The restaurant generated pre-tax operating income of 60,000 in the most recent year. By investing 50,000 in new commercial ovens and grills (depreciable straight line over 5 years to a salvage value of zero) today, you believe that you can increase your operating income significantly each year. How much would your pre-tax operating income have to increase each year for the next 5 years (the remaining period on your lease), for the investment to make economic sense, if your cost of capital is 15%?(The main rate of corporation tax is 25%)

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