What is the net present value of this venture

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Teresa's Tanning Salon expects annual sales of $175,000, annual fixed cash outlays are $76,000 a year at each location, variable cash outlays are 20 percent of sales, depreciation is $15,000 per year, and taxes are 32% (of pretax income). Initial outlay for the building is $140,000. The company does its analysis based on a 10-year store life. We believe the business can be sold for $100,000 after taxes (disposal value) at the end of its 10 year lifer. Using an 10% required return, what is the net present value of this venture?

Reference no: EM13268017

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