PrideCo is manufacturer of Detroit Lions merchandise. They want to start marketing Jared Goff jerseys and they think they can selling about 1,000 per year for three years, priced at $75 per jersey. The cost of manufacturing the jerseys is $20,000 per year, not counting depreciation. They don't need additional fixed capital to make the Goff jerseys, but they do have to use existing warehouse space and machinery time. They believe they could rent out the time to other companies making apparel, and the foregone rent (if they make the Goff jerseys) would be $1,000 per year pre tax. The new project would require, starting at time zero, $5,000 of additional working capital which would not increase over the next three years and could be recovered at the end of three years. While PrideCo made no Matthew Stafford jerseys last year (he is now on the L.A. Rams), a manager believes that the Goff jerseys would erode their future sales of Matthew Stafford jerseys, and that the lost contribution margin (Sales - Operating costs per unit of Stafford jerseys was $55 per unit times the number of eroded units. He believes that 10% of Goff jerseys are sales that would have been Stafford jerseys if they didn't make the Goff jerseys. The tax rate for PrideCo is 21%, the required rate of return on the project is 8%