Your first task is evaluating whether Lulu should expand by developing a new lingerie line. Your research reflects the following information: You expect the proposed project to span the next five years. Current estimates indicate sales will be 200,000 units in year one with 15% sales growth over the following 2 years and 6% growth in the final 2 years. The unit price in Year 1 is $50. Given estimated demand and inflationary pressure, prices are expected to rise by 5% each subsequent year. The project requires purchasing new equipment worth $3 million, after installation. The new equipment is state-of-the-art, so you expect to be able to sell it for $500,000 when the project ends. As a result of the project, current assets would increase by $750,000, and payables would increase by $450,000. The new equipment falls into the MACRS 7-year class, so the applicable rates are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, 8.92%, 8.93%, and 4.46% in each successive year. Variable costs are estimated to be 70% of sales revenue, fixed costs excluding depreciation would are estimated at $2,500,000 per year, the state-plus-federal tax rate is 25%, and the corporations cost of capital is 12%.

Calculate the initial capital outlay, operating cash flows, and terminal cash flow for this project.