Kirk Tiberius is the financial manager for MicroDryer Enterprises, a company that manufactures microwave dryers. Using microwaves eliminates shrinkage of cotton and wool because clothing can be dried at a much lower surface temperature. The firm currently offers a full-size microwave dryer that is extremely energy efficient and dries clothes much faster than conventional dryers. However, it seems that the American consumer is either uninterested in energy efficiency or unwilling to purchase the rather high-priced full-size microwave dryer. Thus, MicroDryer Enterprises is considering development of a new product: a countertop microwave dryer that could be used in dorm rooms, apartments, hotels, or RVs. Kirk's job is to determine the financial feasibility of this venture based on sales and cost estimates provided by the marketing division and others. Kirk has been provided with the following estimates.

- Expected annual sales in year 1 are 235,000 units. (Sales are expected to increase at a rate of 15% a year through year 4, at which point sales will decrease at a rate of 20% a year through year 10.)

- No sales cannibalization is expected to occur.

- Expected sales price is $250 per unit in today's dollars.

- Expected development costs of the product (at time 0) are $50,000,000, which will be depreciated over 10 years using the straight-line method.

- Annual fixed costs of production are $1,000,000 in today's dollars.

- Variable costs of production are estimated to be $100 per unit in today's dollars.

- Variable costs, fixed costs of production, and the sales price will increase at the rate of inflation each year, which is expected to be 2.89% annually.

- The tax rate for MicroDryer Enterprises' is 34%.

- The inventory balance is 35% of revenues, accounts payable are 50% of inventory, and accounts receivable are 10% of revenue.

- The expected life of project is not known, so the company has estimated that cash flow after the tenth year will increase at an annual rate of 3.5%.

- The firm's nominal discount rate is 11%.

Based on this information, what recommendation should Kirk make concerning the countertop microwave dryer project? Use nominal values for your analysis.