2. Charlie Automotive is considering constructing a new warehouse to store a large number of their premium cars during severe weather events. The firm anticipates the new building will cost $270,000 to construct and will require the firm to purchase $25,000 worth of specialized equipment. Installation of the equipment will cost $3,000 in total. The firm will be required to initially increase their net working capital position by $50,000. All depreciable assets are planned to be depreciated on a straight-line basis over 10 years to a residual value of zero. Charlie Automotives annual operating expenses are expected to decline from $570,000 per annum to $545,000 per annum as a result of the new warehouse. Annual revenues are expected to increase from $1,200,000 per annum to $1,300,000 per annum. The firm will also increase its net working capital position by $10,000 per annum over the life of the investment. The firms marginal tax rate is 40 percent.

Compute the projects annual net cash flows over the next 10 years, assuming the new warehouse is constructed, and also compute the projects net investment and termination cash flow at the end. Please show step-by-step solutions