AlphaRack is the leading domestic producer of leather shoes and sandals. Recently, the company CEO, Mr. Callum, identified a niche market of environmentally friendly sport shoes (made from bamboo) for runners that looked promising and not yet served by large manufacturers. The company investigated the potential of this product through an independent market research company, who charged $175,000 for the test marketing. The market research gives a nod to the proposed project. Other information regarding the project: . Project life: 3 years The new bamboo shoes would be manufactured in the space (land) already owned by the firm. If the company does not invest in the project, it can lease the space and earn after-tax rental fee of $140,000 per year for 3 years. . Cost of machinery: $240,000. The machine is depreciated straight line to zero and can be sold as scrap for $35,000 at the end of the project's life. . Upon the undertaking of this project, the company would need to hire a project manager whose salary is estimated at $70,000 per year. . Production by year during the three-year life of the machine is expected to be as follows (respectively): 5,000 units; 8,000 units; and 12,000 units. Unit selling price: $120. Unit cost of production: $80. The firm intends to maintain a cash buffer against operating expenditures (working capital). Initial investment in working capital is $45,000. After that, working capital is required at 10% of revenue each year. In year 3, working capital requirement is 0. . The project is partially funded by a loan with HSBC, which charges interest expense of $75,000 a year. . The firm's WACC is 8.5%. The required return for projects that have similar risk to this bamboo shoes project is 12% Corporate tax rate is 30% Should the company go ahead with the project? Justify your