Fast Fitness Limited is a major retailer of fitness machines and accessories. It is currently considering...

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Fast Fitness Limited is a major retailer of fitness machines andaccessories. It is currently considering investing in a new storein Brisbane. The Brisbane store will have a lifespan of 20 yearsand the new investment will require an initial investment of $30million. It will be fully depreciated on a straight-line basis overthe life of the store. The store is expected to generate annualsales of 5,000 fitness machines, and the price of each machine is$2,300. Sales of accessories will be another $500,000 per year.Operating expenses of running the store, including labour and rent,will amount to 60 per cent of the revenues from the fitnessmachines. The business will need to invest $2 million in additionalworking capital immediately, and recover it at the end of theinvestment.
The company tax rate is 30%, and the opportunity cost of openingup the store is 10%. What are the incremental cash flows from thisproject at the beginning of the project as well as in years 1-19and 20? Should the project be approved? Tabulate your answersclearly
(SHOW WORKINGS PLEASE)

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Fast Fitness Limited is a major retailer of fitness machines andaccessories. It is currently considering investing in a new storein Brisbane. The Brisbane store will have a lifespan of 20 yearsand the new investment will require an initial investment of $30million. It will be fully depreciated on a straight-line basis overthe life of the store. The store is expected to generate annualsales of 5,000 fitness machines, and the price of each machine is$2,300. Sales of accessories will be another $500,000 per year.Operating expenses of running the store, including labour and rent,will amount to 60 per cent of the revenues from the fitnessmachines. The business will need to invest $2 million in additionalworking capital immediately, and recover it at the end of theinvestment.The company tax rate is 30%, and the opportunity cost of openingup the store is 10%. What are the incremental cash flows from thisproject at the beginning of the project as well as in years 1-19and 20? Should the project be approved? Tabulate your answersclearly(SHOW WORKINGS PLEASE)