A plant manager at a computer hardware manufacturer is considering a 5-year project to improve the packaging for its new tablets in order to prevent damage to the screens and reduce waste. The project requires a temporary product line to be set up in a warehouse that is currently rented out to a local distributor. The manager has collected the following information on the project: . The project requires an immediate investment of $400,000 in new equipment. The equipment will have a 5-year economic life and will be depreciated straight-line to a salvage value of zero. After 5 years, the equipment can be sold for $150,000. . The product line is expected to produce revenues of $500,000 per year (starting in year 1) and its operating cash costs are expected to be $275,000 peryean - The rent the rm receives on its warehouse equals $120,000 per year. The warehouse has been fully depreciated and the rm plans to sell the warehouse to the distributor at the end of year 5 for $900,000, irrespective of whether it undertakes the project. 0 Operating the product line will require the rm to maintain a level of Net Working Capital equal to 25% of the revenues in the following year (i.e., the NWC is built up a year in advance of the sales). 0 Since the project reduces waste, the rm can claim an immediate one-time tax credit of $40,000 if it sets up the new product line. The manager has estimated that the relevant cost of capital for an investment of this type equals 14%. The marginal corporate tax rate for the computer rm is 20%. Furthermore, you can assume that all cash ows are realized at the end of the year. With this information, please answer the following two questions. (1') Should the manager go ahead with the investment project? Motivate your answer and show all your calculations