Current Attempt in Progress

You are the CFO of Ivanhoe, Inc., a retailer of the exercise machine Ivanhoe$6$ and related accessories. Your firm is considering opening

a new store in Los Angeles. The store will have a life of $20$ years. It will generate annual sales of $5,500$ exercise machines, and the price

of each machine is $$2,750.$ The annual sales of accessories will be $$756,000,$ and the operating expenses of running the store, including

labor and rent, will amount to $50$ percent of the revenues from the exercise machines. The initial investment in the store will equal

$$34,900,000$ and will be fully depreciated on a straight$-$line basis over the $20-$year life of the store. Your firm will need to invest

$$2,000,000$ in additional working capital immediately and recover it at the end of the investment. Your firm's marginal tax rate is $30$

percent. The opportunity cost of opening up the store is $12\mathrm{.}20$ percent.

What are the incremental free cash flows from this project at the beginning of the project as well as in years $1-19$ and $20?($Do not

round intermediate calculations. Round NPV answer to $2$ decimal places, e$.$g$.5,275\mathrm{.}25$ and all other answers to $0$ decimal places, e$.$g$.5,275.)$

Incremental cash flow at the beginning of the project $

Incremental cash flow in the years $1-19$

$

Incremental cash flow in the year $20$

$

NPV of the project

$

Should you approve it$?$

You

the project.