Movies, Inc. is considering a new project producing educational movies for children. The project requires an investment in equipment of $1,800,000. The equipment will be fully depreciated using straight line depreciation over its 8 year accounting life. At the end of the project the firm expects to be able to sell the equipment for $125,000. The firm expects to sell 475,000 million videos each year for 5 years. The retail price for each video will be $20.00 and variable costs related to production are $12.00 per video. Additional fixed costs include $900,000 per year for labor, $450,000 for rent and $200,000 for all other expenses. The project also requires an additional investment in net working capital of $700,000, all of which will be returned to the firm at the end of the project. The firms marginal tax rate is 34% and the required return on this project is 12%, compounded quarterly. Would you recommend this project to the firm? Why or why not? Clearly explain your answer.