Plan 9 is analyzing a record store. They already own a building. They could sell the building for $200,000 (assume that is the current book value on the building as well.)

-They expect EBIT for the project to be $15,000 in the 1st year and then grow by 5% each year after that.

-They expect Net Working capital will increase by $5,000 to start the business (this will be your initial NWC for the store), then increase with sales.

-The building will be depreciated on a straight line basis over 20 years.

-They plan to keep the store open for 5 years and then sell the building for $220,000.

-Net working capital will return to its previous level prior to opening the new store.

-There will be no shut down expenses for closing the store.

-Their marginal tax rate is 25%.

-Assume Plan 9's WACC is 10%.

what is the initial outlay, cost basis, gain, tax on gain, change in NWC and the total terminal cash flow.

Complete a after-tax cash flows and projected cash flows.