View Help 215 AaBbccdc AaBbcc 1 Normal 1 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasi Styles Sara has just inherited $250,000 from her aunt's estate. She is considering opening a small sewing and fabric shop. She would need to purchase inventory costing $50,000. Sara plans to rent a shop in a local shopping center for $12,000 per year. Fixtures, display equipment, and furniture will cost $18,000 and will be depreciated $3,000 per year for 5 years to its expected salvage value of $3,000. Operating costs will amount to $25,000 per year. Sara estimates her revenues from sales and sewing services will total $65,000. Because Sara believes she can earn a 10% return by investing in mutual funds, she does not want to start the business unless she can earn at least this rate. Ignore income taxes. 1) Prepare a schedule of expected cash flows for the proposed investment by completing the table provided below. In Column 1 enter a brief description of the cash flow. In Column 2 indicate whether the cash flow is an inflow (1) or an outflow (O). In Column 3 enter the years in which the cash flow will occur. For example, if the cash flow occurs immediately enter a 0. If the cash flow occurs each year, enter 1-5, etc. In Column 4 enter the cash flow item Description Inflow/Outflow Years Amount 2) What is the initial outlay for this capital investment (i.e., the amount of the cash flow at time =0)? 3) What is the amount of the annual net cash flow for this capital investment? 4) What is the net present value of the proposed venture? Should Sara proceed