1. Scenario Analysis. Let's reconsider Whole Foods' decision about whether to build a new grocery store in Newton. Scenario 1 assumes the store will be paid for in year 0, have a useful life of 12 years, be depreciated over 12 years and have a market value of S0 at the end of year 12. Scenario 2 assumes lower sales and higher costs as shown below, but that the store will have a useful life of (and be straight-line depreciated over) 15 years, and that the market value of store will be S0 at the end of 15 years Capital Expenditure Annual Sales Annual Variable Costs Annual Fixed Costs Annual Depreciation Scenario 1 $5,400 $16,000 $13,000 $2,000 $450 Scenario 2 $6,000 $15,600 $13,000 $2,200 What is the annual depreciation charge in scenario 2? What is the annual cash flow from operations under each scenario? What is the NPV of the grocery store under each scenario? (Assume the tax rate is 40% and Whole Foods, annual discount rate is 8%.)