Hollings Company, a furniture manufacturer, is considering investing in some new production machinery. The details of this investment are:

Amount of Investment $ 342,000

Annual cash flow revenue - $147,000

Annual cash flow expenses - $60,000

Life of the project (in years) - 10

Scrap value of the equipment at the end of the project - $ 18,000

Hollings Company's corporate tax rate of 34.00%

Hollings Company's weighted average cost of capital - 12.00%

CCA rate on the new equipment - 25.00%

Required:

1) Calculate the net present value of this project.

2) Calculate the profitability index.

3) Should Hollings proceed with the new project?