Firm XYZ is considering a project to built a new facility to install a new production line. The firm requires a minimum return of 10% in this project, due to the risks involved. The firm is a 34% tax bracket. Sales, revenues and costs details are given in the table below:

Cost of new plant and equipment	$9,700,000
Shipping and installations costs	$300,000
Unit Sales forecasted Year 1 50,000 Year 2 100,000 Year 3 100,000 Year 4 70,000 Year 5 50,000
Sales price per unit sold	$145
Variable costs per unit produced	$80
Annual fixed costs	$500,000
Net Working Capital requirements	An initial $100,000 will be needed to start production. After that, net working capital requirements until year 5 will be equal to 5% of the total sales for the year. No NWC will be recuperated at the end of year 5
Depreciation	Using the straight-line method, the depreciation expense is $2,000,000 per year during the five years of the project life.

Tasks:

Estimate the CCFA for the next 5 years of operation

Using the NPV and IRR decision methods, decide if the firm should take the project.