Mel Mel's Pasta Company is looking to expand their product line. Based upon a market study, costing $10,000, they believe it's time to expand. To expand they will require a new cutting machine worth $355,000. The cutting machine has a CCA rate of 25%. To acquire the machine, they will incur $14,500 of shipping fees and $30,000 of installation fees. The machine is expected to have a useful life of 10 years at which time they will get $55,000 as a resale value. Mel Mel's Pasta Company anticipates that they will need to add $68,000 of inventory and their accounts payable will increase by $34,000. They expect this new line will generate $126,000 in new sales per year. The operating expenses are expected to grow by $15,000 per year due to the new line. This new product line will compete with existing sales, and they will drop by $21,500 per year due to this project. Mel Mel's Pasta Company has a tax rate of 30% and required rate of return of 11%.

a) Based upon an NPV analysis should they accept or reject the project?