You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphitelike material in its tennis rackets. The company has estimated the information in the following table about the market for a racket with the new material. The company expects to sell the racket for six years. The equipment required for the project will be depreciated on a straight-line basis and has no salvage value. The required return for projects of this type is 13 percent and the company has a 21 percent tax rate. Should you recommend the project?

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Pessimistic Expected Optimistic Market size 110,000 120,000 132,000 Market share 25% 20% 23% $ 139 $ 143 $ 147 Selling price Variable costs per unit Fixed costs per year $ 77 $ 73 $ 70 $ 975,000 $ 890,000 $2,300,000 $2,150,000 $1,950,000 $ 920,000 Intial investment