The Blah Blah Blah (BBB) company is an online retailer.You have been hired as the company's new Director of Finance.On your first day at work, you are call into the Management Team meeting.BBB is evaluating building a new $50 million warehouse facility.The facility is expected to have an economic life of 25 years and at that time, it is estimated, the facilities will be sold for $188,895.The building will be depreciated with a CCA of 20%.There are no other depreciable assets for this investment.Inventory held in the facility will be approximately 10% of the next year's sales.There will be no other effect to Working Capital.

Sales from the new facilities are expected to be $30 million per year and are expected to grow at 3% annual.Contribution Margin is expected to be maintained at 25%.Fixed costs, excluding depreciation, is expected to be $1.5 million.These costs are expected to grow inline with inflation at 2%.

The CEO wants to know your opinion of if the facility makes sense financially, considering the company typically gets a return on its assets (ROA) of 8%.He would like your answer within an hour.

You can feel the entire Management Team watching you as you walk out of the meeting room.You scramble back to your office.After banging your head on your desk for 5 minutes, you notice that you have BBB's consolidated financial statements for 2019 on your desk:

Blah Blah Blah Blah Blah Blah Balance Sheet Income Statement As of November 30, 2019 Fiscal Ending Novemeber 30, 2019 Assets Revenue 87,346,000 Current Assets 3,463,550 COGS 48,419,000 Non-Current Assets 257,002,573 Gross Profit 38,927,000 Total Assets 260,466,123 Operational Expenses 12,754,000 Earnings Before Taxes 26,173,000 Liabilities Taxes 5,234,600 Current Liabilities 7,626,200 Net Earnings 20,938,400 Non-Current Liabilities: 75,000 25 years Bonds - Maturing on Nov 30, 2039 - $50 Coupon annual 75,000,000 Other Non-Current Liabilities 5,412,600 Total Liabilities 88,038,800 Shareholders' Equity Common Shares - 2,500,000 25,000,000 Shares Outstanding Preferred Shares - $100 Par Value 10,000,000 5% cumulative - 100,000 outstanding Retained Earnings 137,427,323 Total Shareholders' Equity 172,427,323 Total Liabilities and Shareholders' Equity 260,466,123