Assume that you just graduated college and are employed at an investment bank making $120,000 (after-tax) per year, and you expect to make the same amount for each of the next 5 years. A classmate from MBA643, who knows what a hard party person you were, gives you a call and tries to convince you to join forces with him on a project. The project is to produce a new type of vodka, Hangovers over, which comes with the premise of not making one 2 feel hangover the next morning no matter how many bottles one drinks. If you decide to join, you will have to quit your current job and work full-time on the project. The project requires an initial investment of $400,000 in production equipment, which can be depreciated straightline over 5 years to a salvage value of $80,000. You own a house that you are currently renting out for $24,000 a year and you are planning to use the house as your office if you join the project. You expect to sell 20,000 bottles of the Hangovers over at $40 per unit each year for the next 5 years. The production cost is $15 per unit, and fixed costs associated with the project are estimated to amount $150,000 per year. Assume that your tax rate is 40% and your discount rate for projects with similar risk is 12%. Should you accept the project?