A firm is considering the following investment project:

Before-Tax

Cash Flow

Year (thousands)

0 -$1000

1 +500

2 +340

3 +244

4 +100

5 +100 (+125 Salvage Value)

The project has a 5-year useful life with a $125,000 salvage value, as shown. Double declining balance deprectiation will be used, assuming the $125,000 salvage value. The combined income tax rate is 34%. If the firm requires a 10% after-tax rate of return, should the project be undertaken?