Pappy$$s Potato has come up with a new product, the Potato Pet $($they are freeze$-$dried to last longer$).$ Pappy$$s paid $$180,000$ for a marketing survey to determine the viability of the product. It is felt that Potato Pet will generate sales of $$895,000$ per year. The fixed costs associated with this will be $$228,000$ per year, and variable costs will amount to $24$ percent of sales. The equipment necessary for production of the Potato Pet will cost $$970,000$ and will be depreciated in a straight$-$line manner for the four years of the product life $($as with all fads, it is felt the sales will end quickly$).$ This is the only initial cost for the production. Pappy's has a tax rate of $22$ percent and a required return of $16$ percent.