Find after tax operating margin

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You are the manager of a grocery store and you are considering offering baby sitting services to your customers. .You estimate that the licensing and set up costs will amount to $150,000 initially and that you will be spending about $60,000 annually to provide the service. As a result of the service, you expect sales at the store, which are $5 million currently, to increase by 20%; your after tax operating margin is 10%. If your cost of capital is 12% and you expect the store to remain open for 10 years, would you offer the service?

Reference no: EM133069598

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