Firm ABC is contemplating a logistic project that will reduce operating cost by 345000 a year for 10 years.

The project will not create additional sales and it requires an investment in equipment of 37000.

The equipment will be depreciated using straight-line method to zero values in 10 years. The equipment can be sold at 11100 at the end of project. The project needs additional inventory of 3400 and will be recouped at the end of project? Tax rate is 35 percent. Should the firm accept the

project if the required rate of return is 8 percent?