Atlantic Mercury Corporation wants to expand into a new line of quantum redactors. The project will last for eight years. Production will require the purchase of two new machines. The first machine will cost $280,000 and will be depreciated using the 10-year MACRS schedule. The second machine will cost $180,000 and will be depreciated using the 10-year MACRS schedule. Production of the redactors will require initial increases in inventory of $240,000, initial increases in accounts receivable of $110,000, and initial increases in accounts payable of $450,000. Additional net working capital (NWC) changes each year will equal 12 percent of the projected sales change for the following year. Unit production estimates for the next 8 years are given in the table below:

Year12345678

Units Sales9,5009,60010,3008,0008,7009,0004,2001,900

The price per unit will initially be set at $95. However, the price is expected to increase 7 percent each year over the life of the project. Variable costs will initially be set at $54 per unit, and fixed costs will be $250,000 per year. Variable costs will decrease 1 percent per year over the life of the project, but fixed costs will remain constant.

The first machine can be sold for $2,000 at the end of the project's life, and the second machine can be sold for $1,000 at the end of the project's life.

The cost of capital for Atlantic Mercury is 31%, and it has a marginal tax rate of 20%.

Consider the following scenarios:

Worst-Case Scenario	Best-Case Scenario
Cost of Capital = 31.75% Price Inflation = 5.6% Fixed Costs = $325,000	Cost of Capital = 30.25% Price Inflation = 8.4% Fixed Costs = $175,000

What is the NPV and the accept/reject decision for each of the scenarios above assuming the original MACRS class for the first machine?