Benford Inc. is planning to open a new sporting goods store in a suburban mall. Benford will lease the needed space in the mall. Equipment and fixtures for the store will cost $300,000 and be depreciated over a 5-year period on a straight-line basis to $0. The new store will require Benford to increase its net working capital by $300,000 at time 0. First-year sales are expected to be $2 million and to increase at an annual rate of 9 percent over the expected 10-year life of the store. Operating expenses (including lease payments and excluding depreciation) are projected to be $700,000 during the first year and increase at a 6 percent annual rate. The salvage value of the stores equipment and fixtures is anticipated to be $10,000 at the end of 10 years. Benfords marginal tax rate is 40 percent. Round your answers to the nearest dollar.

Compute the net investment required for Benford.

$

Compute the annual net cash flows for the 10-year projected life of the store.

Year	NCF
1	$
2	$
3	$
4	$
5	$
6	$
7	$
8	$
9	$
10	$

Compute the annual net cash flows assuming equipment and fixtures are depreciated using the 7-year asset class under MACRS. Use Table 9A-3 to answer the question.

Year	NCF
1	$
2	$
3	$
4	$
5	$
6	$
7	$
8	$
9	$
10	$