Pappys potato has come up with a new product, the Potato Pet. Pappys paid $120,000 for a marketing survey to determine the viability of the product. It is estimated that Potato Pet will generate sales of $650,000 per year. The fixed costs associated with this project will $200,000 per year and variable costs will amount to 20% of sales. The equipment will cost $540,000 and be depreciated in straight-line manner for 6 years, but the life of the new project is only 4 years. The equipment can be sold for $200,000 at the end of the project. The initial net working capital is $40,000 and will increase by $10,000 each year until the end of the project. Pappys is paying 40% tax rate and has a required rate of return of 13%.

Need help finding CFFA.