Best Buy Electronics has just developed a new electronic device that it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information:

New equipment would have to be acquired to produce the device. The equipment would cost $300,000 and have a six-year useful life. After six years, it would have no salvage value.

Sales in units over the next six years are projected to be as follows:

Production and sales of the device would require working capital of $60,000 to finance accounts receivable, inventories, and day-to-day cash needs. This working capital would be released at the end of the projects life.

c. The devices would sell for $35 each; variable costs for production, administration, and sales would be $25 per unit.

Fixed costs for salaries, maintenance, property taxes, insurance, and straight-line depreciation on the equipment would total $90,000 per year. (Annual depreciation of the new equipment in item a is on a straight-line basis over the six-year life.)

To gain rapid entry into the market, the company would have to advertise heavily. The advertising program would be:

f. The company has an overall tax rate of 45% and its required after tax rate of return is 18%.

Please Include step by step

Determine the net present value of the proposed investment. $_________________

Would you recommend that SP accept the device as a new product? Why or why not?