Company is considering an investment of 1.4 million in a project that has a seven year life.The company has estimated it's discount rate at 12% details of the sales and costs associated with the project are as follows.

Sales volume-250,000 units per year

Sales price- $ 4 per unit

Costs

Direct materials-(4 kg at $.40 per kg) $1.60 per unit

Direct labor-(0.1 hours at $8 per hour) $.80 per unit

Overhead- $330,000 per year

Note the annual overhead includes $200,000 per year depreciation on the asset. It also includes apportioned fixed overhead of a further 50,000 per year.