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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 cash inflows that come JUST in year 6? Enter your answer to three decimals.
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
$ 20,000
Salvage value of equipment
Transcribed Image Text: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 $ 20,000 Salvage value of equipment
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