A logistics company is considering expansion. The planned expansion would cost $$12,000,000$

$($the cost of new delivery vehicles required$)$ and would generate additional revenue of

approximately $$10,000,000$ in year one. The revenue would grow each year with inflation of $2\%.$

There are, however, some costs associated with the expansion. Assume salaries and benefits will

start at $36\%$ of sales and decrease $20$ basis points each year. Fuel expenses will start at $4\mathrm{.}5\%$ of

revenue but increase by $50$ basis points each year. Other expenses will be approximately $30\%$

each year, with a $10-$basis point improvement annually. The company currently has a tax rate of

$21\%,$ and you can assume that the tax rate will remain constant. To keep the new delivery center

open, working capital of $8\%$ of next year's sales will be required.

Please create a model that shows NPV $($using tax depreciation$)$ and EPS $($using book

depreciation$)$ for the next $7$ years. Assume the company uses straight$-$line depreciation for book

$($EPS$)$ purposes and uses the $7-$year MACRS tables for the NPV analysis. The company currently

has a $12\%$ WACC $,$ and there are $800,000$ shares outstanding.