ConnectDots Corp. is considering making a new product. The new product is expected add $3.67 millions to the firm's sales and the expected costs are $1.01 millions. The shareholders of ConnectDots requires 5.9% return and the corporate tax rate is 39 percent. This project has 3 years life and requires $4.27 millions investment in fixed assets. The fixed assets will be depreciated straight-line and the expected salvage is zero. The project requires $20,000 investment in net working capital. Net working capital will be recovered at the end.

a. Calculate the NPV of the project.

b. Should the firm take the project? State your reasons.