1. A proposed project requires an initial investment in fixed asset of $1,200,000 and is depreciated straight-line to zero over its 3-year life. The project is expected to generate sales of $1,500,000 per year. It has annual fixed costs of $200,000 and annual variable costs of $400,000. The required rate of return on the project is 20 percent. The relevant tax rate is 25 percent. At the end of the project (i.e., year 3) the asset can be sold for $500,000 (before taxes). In addition, the project requires a net working capital of $200,000 at the beginning of the project and will be recouped at the end of the project. Calculate the project's net present value (NPV). Should the project be accepted