Question

You nave one LASTattempt Tert Or this question Tor crealt 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 $500 to set up operations. Assuming a required rate of return 7%, what is the NPV of each store? Place your answer in dollars and cents, without any comma or dollar sign. Work your analysis out using at least four decimal places of accuracy. CHECK ANSWER

Answer 1

Year	0	1	2	3	4	5
Initial investment	-500
cash inflow =180		180	180	180	180	180
present value of cash flow = cash flow/(1+r)^n r = 7%	-500	168.2243	157.21897	146.933618	137.321138	128.337512
NPV = sum of present value of cash flow	238.03554