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What is the npv of opening the bakery

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Question - You are the owner of a small bar, The World, and you are considering opening a bakery in a vacant area in the back of the store. You estimate that it will cost you $53,611.00 to set up the bakery and that you will generate $10,539.00 in after-tax cash flows in for the life of the store (which is expected to be 10 years.) The one concern you have is that you have limited parking; by opening the bakery you run the risk of not having enough parking for customers who enjoy your bar. You estimate that the lost sales would amount to $3,520.00 per year and that your after-tax operating margin on sales at the bar is 51.00%. If your discount rate is 15.00%, what is the NPV of opening the bakery?

Reference no: EM133161829

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