You are the CFO of SweetHealth, a retailer of the exercise machine SweetHealthX and related accessories. Your firm is considering opening up a new store in NewYorkCity. The store will have a life of 20 years. It will generate annual sales of 5,000 exercise machines, and the price of each machine is $2,500.The annual sales of accessories will be $600,000, and the operating expenses of running the store including labor and rent, will amount to 50 percent of the the revenues from the exercise machines. The initial investment in the store will equal $30 million 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 million in additional working capital immediately, and recover it at the end of the investment. Your firms marginal tax rate is 30 percent. The opportunity cost of opening up the store in 10 percent. At the end of the stores life, the company expects to sell various fixtures and equipment for $2,000,000.

a) Determine the payback period for the project. b) Determine the net present value of the project. c) Determine the internal Rate of return of the project. d) Explain why you would or would not recommend the project.