A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores...

A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores are feasible in various parts of the country. The cash flow at each store is expected to be $180 per year for five consecutive years. Each store requires an immediate investment of $450 to set up operations. Assuming a required rate of return 8%, what is the NPV of each store?

Expert Solution

Solution :

The NPV of each store is = $ 268.69

= $ 269 ( when rounded off to the nearest whole number )

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 7 months ago

A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores...

A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores are feasible in various parts of the country. The cash flow at each store is expected to be $190 per year for five consecutive years. Each store requires an immediate investment of $550 to set up operations. Assuming a required rate of return 8%, what is the NPV of each store?

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A cookie company wants to expand its retail operations. Based on a preliminary study, 10 stores...

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