You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphite-like material in its tennis rackets. The company has estimated the information in the table below about the market for a racket with the new material. The company expects to sell the racket for five years. The equipment required for the project has no salvage value and will be depreciated on a straight-line basis. The required return for projects of this type is 13 percent, and the company has a 40 percent tax rate. Should you recommend the project?

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PESSIMISTIC 78,000 EXPECTED OPTIMISTIC 108,000 95,000 Market size Market share Selling price Variable costs per year Fixed costs per year Initial investment 14% 17% 115 36 $ 575,000 19% 120 $ 112 38 34 $ 615,000 $1,550,000 $ 550,000 $1,450,000 $1,350,000