You have been observing the surge in health awareness in Australia for some time and realise that the time is right for you to start and run an aerobic exercise centre. Your family owns a warehouse, which will meet your needs, and until recently it has been renting at $48,000 per year. You estimate that you will need to spend $100,000 in total.This $100,000 will be made up of an initial cost of $50,000 to renovate the premises, $45,000 for new equipment, and $5,000 to install the equipment. You have done a market survey, at a cost of $3,000, which leads you to believe that you will get 500 members each paying $1,000 per year. You have also found 5 instructors you can hire at $30,000 each per year. For tax reasons you will expense the renovation costs immediately and depreciate the equipment (including the installation cost) over ten years using the straight-line method. However you will expect the equipment to be full functional for 15 years, which is the life of the operation. Due to the nature of fitness equipment it will be unlikely to have a salvage value at the end of 15 years. Assume the initial investment is made today and all cash flows are received or paid at the end of each year. Your discount rate is 15% p.a. and your tax rate is 40%.