To calculate the initial cash flow of the project, we need to consider several components:

1. Construction costs: This is the cost of building the new shop, which is an outflow. $-2,264,000$

2. Additional expenses: These expenses are immediately tax-deductible, which reduces the tax burden. The net outflow will be the expenses after accounting for the tax benefit.

   • The tax deduction is calculated as $256,000 \times 30\% = 76,800$.
   • The net outflow for the additional expenses is: $256,000 - 76,800 = 179,200$ So the net outflow here is: $-179,200$

3. Inventory costs: Setting up the shop requires inventory of $424,000, which is another outflow. $-424,000$

4. Land value: Since the land is not being sold, its value does not impact the initial cash flow. However, it is worth noting for potential future calculations, but for now, it is irrelevant.

Now we sum up all the relevant initial cash flows:

$\text{Initial cash flow} = -2,264,000 - 179,200 - 424,000 = -2,867,200$

Total Initial Cash Flow:

$\boxed{-2,867,200}$

This is the total cash outflow at the start of the project.

Would you like further clarification or details on any part of the solution?

Here are five related questions to consider:

1. How does the corporate tax rate affect the depreciation calculations in future cash flows?
2. What would be the impact on cash flows if the company sold the land?
3. How does straight-line depreciation impact financial statements over the 10-year period?
4. What role does inventory play in working capital management for the project?
5. How would different financing options for the building affect the initial cash flow?

Tip: Always consider tax benefits when assessing initial cash flows, as they can significantly reduce outflows.