#$2(50$ points$)\_$SJB Corp is considering the expansion of their building. The expected cash outlay for this project is $$100,000.$ The new building is expected to generate net cash flows of $$30,000$ in year $1,$$$40,000$ in year $2$ and $$110,000$ in year $3.$

SJB wants to maintain their current capital structure $($see balance sheet below$).$ Their current outstanding bond yield is $5\%,$ and new bonds can be issued for $4\%.$ Currently, the stock for SJB has a dividend yield of $2\%$ and their expected growth rate is $7\%.$ In the past, SJB stock has averaged $$30\mathrm{.}00$ a share and is considered to be of average risk. SJB is subject to a $32\%$ marginal tax rate. You must 'show your work' $($in the spread sheet$)$ to receive full credit.

A$)$ Should SJB Corp pursue this project? Why or why not?

B$)$ If they pursue the project, what would their projected balance sheet look like?