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Foodie Supply (FDS), an upscale restaurant supply chain, currently operates nine stores in Tennessee and Alabama. Management is contemplating building a tenth store across town from its most successful outlet. The company already owns the land for the store and a warehouse on it, which can be used as the store. Currently FDS rents the warehouse out for $300,000 per month. FDS has purchased the land 5 years ago for $10 mln. Currently the market value of the land (together with the building) is $15 million, and FDS would sell the land if it decides not to open the store. Last month, the marketing department spent $200,000 on market research to determine the extent of customer demand for the new store. The research has determined that the new store would attract customers of the existing FDS store who currently have to drive across the town to the existing store.However, according to the marketing report, if FDS does not open the store in the proposed location, Restaurant Depot, its main competitor will, and will attract 50% of those from-across-the-town customers of FDS. FDS plans to finance new equipment (commercial fridges, stoves, etc.) for the new store with new debt. Now FDS must decide whether to build and open the new store.

1. Which of the following should be included in the model for estimation of NPV of the new store? (remember to only include items that result in incremental changes in cash inflows/outflows)

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