Capital Budgeting Exercise 2 Your company has spent $400, 010 on research to develop a new computer game . The firm is planning to spend $609 , 090 on a machine to produce the new game . Shipping and installation costs of the machine will be capitalized and depreciated they total $50 000 . The machine will be used for 3 years , has a $109 909 estimated resale value at the end of three years , and will be depreciated straight line over 4 years . Revenue from the new game is expected to be $800 090 per year , with costs of $300 090 per year . The firm has a tax rate of 35 percent an opportunity cost of capital of 8 percent , and it expects net working capital to increase by $150,000 at the beginning of the project . Should you proceed with this project ? Explain Year Sales 809090 800090 800900