Problem 1 Under a special licensing agreement, Casey Company has an opportunity to market a new product in the Philippines for a five year period. The product would be purchased from the manufacturer, with Casey Company responsible for all costs of promotion and distribution. The licensing arrangement could be renewed at the end of the five year period at the option of the manufacturer. After careful study, Casey has estimated that the following costs and revenues would be associated with the new product. Cost of equipment needed P 60,000 Working capital needed 100,000 Overhaul of the equipment in four years 5,000 Salvage value of the equipment in five years 10,000 Annual revenues and costs Sales Revenues 200,000 Cost of goods sold 125,000 Out-of-pocket operating costs(for salaries, Advertising, and other direct costs) 35,000 At the end of the five-year period, the working capital would be released for investment elsewhere if the manufacturer decided not to renew the licensing arrangement. The company's cost of capital is 20%. Required: Using the net present value, would you recommend that the new product be introduced