Sovrano Caf is considering a major expansion of its business. The details of the proposed expansion project are summarized below:

• The company will have to purchase $800,000 equipment, that require installation cost and transportation cost equal $150,000.
• The project has an economic life of 6 years.
• The cost can be depreciated using straight line method.
• At t = 0, the project requires that the account receivable to increase by $200,000 and the inventory by $350,000 while the account payable to increase by $400,000
• The projects salvage value at the end of 6 years is expected to be $160,000.
• The company forecasts that the project will generate $725,000 in sales the first 3 years and $650,000 in sales during the last 3 years
• Each year the projects operating cost excluding depreciation is expected to be 50% of sales revenue.
• The companys tax rate is 40%
• The company already pays marketing expenses equal 80,000.
• The projects cost of capital is 10%

What do you recommend?