a. if Arabelle expands French prince at the end of year 0, what will her quarterly pre-tax cash flows be through year 2? b. project the quarterly pre-tax cash flows assuming that the sales pattern (10% annually compounded increase) continues through year three.
a. if Arabelle expands French prince at the end of year 0, what will her quarterly pre-tax cash flows be through year 2? b. project the quarterly pre-tax cash flows assuming that the sales pattern (10% annually compounded increase) continues through year three.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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a. if Arabelle expands French prince at the end of year 0, what will her quarterly pre-tax cash flows be through year 2?
b. project the quarterly pre-tax cash flows assuming that the sales pattern (10% annually compounded increase) continues through year three.
Transcribed Image Text:Year
Quarter
Sales (per sq ft)
Incremental Salaries
1
$90
$12,000
2
70
8,000
12,000
24,000
3
120
250
99
12,000
8,000
12,000
77
3
132
4
275
24,000
2.
Transcribed Image Text:Arabelle is considering expanding the floor area of her high-fashion import clothing store, The French Prints of Arabelle, by
increasing her leased space in the upscale Cherry Creek Mall from 2,000 square feet to 3,000 square feet The Cherry
Creek Mall boasts one of the country's highest ratios of sales value per square foot Rents (including utilities, security, and
similar-costs) are $100 per square foot per year Salary increases related to French Prints' expansion are shown in the
following table, along with projections of sales per square foot The purchase cost of goods sold averages 75 percent of
the sales price. Sales are seasonal, with an important peak duning the year-end holiday season.
E Click the icon to view the table
a. If Arabelle expands French Prints at the end of year 0, what will her quarterly pretax cash flows be through year 2?
The cash flows attributable to French Prints' expansion in the first quarter of year 1 are $ (Enter your response as an
integer.)
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