Theresa is considering starting a small business. She plans to purchase equipment costing $149,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $32,400 per year. A market research specialist estimates that Theresa's annual sales from the business will amount to $96,000. Theresa plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? Multiple Cholce $37,600 $58,400 $96.000 None of these answers Is correct.

Theresa is considering starting a small business. She plans to purchase equipment costing $149,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $32,400 per year. A market research specialist estimates that Theresa's annual sales from the business will amount to $96,000. Theresa plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? Multiple Cholce $37,600 $58,400 $96.000 None of these answers Is correct.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter13: Investing In Mutual Funds, Etfs, And Real Estate

Section: Chapter Questions

Problem 9FPE

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Theresa is considering starting a small business. She plans to purchase equipment costing $145,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $30,000 per year. A market research specialist estimates that Theresa's annual sales from the business will amount to $80,000. Theresa plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? A) $24,000 B) $56,000 C) $80,000 D) None of these answers is correct.
Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. (Ignore income taxes in this problem). The data pertaining to her investment opportunity are: (see attached image). Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the present value factor you will use for the net annual cash flows? Enter your answer in three decimals.
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ary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. Ignore income taxes in this problem.) The data pertaining to her investment opportunity are: Cost of equipment $ 175,000 Working capital needed $ 185,000 Annual cash inflow from sales $ 190,000 Annual cash outflow for operating costs $ 145,000 Salvage value of equipment $ 20,000 Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the present value factor you will use for the net annual cash flows?
Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. Ignore income taxes in this problem.) The data pertaining to her investment opportunity are: Cost of equipment                                                 $ 175,000 Working capital needed                                        $ 185,000 Annual cash inflow from sales                             $ 190,000 Annual cash outflow for operating costs              $ 145,000 Salvage value of equipment                                 $   20,000 Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the annual NET savings?
Mary is considering opening a hobby and craft store. Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. Ignore income taxes in this problem.) The data pertaining to her investment opportunity are: Cost of equipment                                                 $ 175,000 Working capital needed                                        $ 185,000 Annual cash inflow from sales                             $ 190,000 Annual cash outflow for operating costs              $ 145,000 Salvage value of equipment                                 $   20,000 Mary plans to operate the business for six years. Mary requires a minimum 6% return on this investment. What is the present value factor you will use for cash inflows that come JUST in year 6?   Enter your answer to three decimals.
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