Answer:
$109,688.89
Explanation:
According to the scenario, computation of given data are as follows,
Formula for Net present value are as follows,
NPV = -Investment in fixed asset - Net working Capital + Operating cashflow × ( 1 - 
) ÷ r + Net working capital ×
Where, r = rate of return
n = number of years
By putting the value, we get
NPV = -28,000 - 2,800 + 32,500 × ( 1 - 
) ÷ 0.14 + 2,800 ×
By solving the above equation, we get
NPV = $109,688.89
Explanation:
The preparation of the year-end income statement for Fighting Okra Cooking Services is presented below:
Fighting Okra Cooking Services
Income statement
As on December 31
Revenue
Service revenue $78,500
Total revenues $78,500 (A)
Less: Expenses
Postage expense $1,500
Legal fees expense $2,600
Rent expense $21,000
Salaries expense $22,000
Supplies expense $20,000
Total expenses $67,100 (B)
Net income $11,400 (A- B)
<span>The two major factors are the supply of the product and the demand for it. These work together to set an equilibrium price that would be considered the market rate for the item under consideration. Changes and shifts in either of the two factors will cause the market price to change accordingly.</span>
