Company X is evaluating a project with the following details. Your job as their PAID consultant is to evaluate the project and determine if they should accept it. Please show your work and list the steps you took to arrive at your conclusion.

The details are as follows:

The initial cost for capital assets (depreciable basis) is $1,000,000. This asset falls into the 10-year asset class as determined by the IRS. It will be depreciated on a straight-line basis.

The incremental Net Working Capital needed will be $100,000

The salvage value at the end of the project is projected to be $0.00

The life of the project will be 10 years

Operations:

Projected Unit price: $18.00 Projected (Annual) Unit sales:$30,000 Projected Annual Cost of Goods Sold:$324,000 Sales and General Admin Costs:$0.00

The firms marginal tax rate:0.35% The firm has no debt but carries a WACC of 10%

Please use NPV, and IRR, to determine your decision.