Tech Pro Inc. is investigating the feasibility of introducing a new high tech

baseball bat. Based on research, conducted by the firm, unit sales are projected

to be as follows:

Year Unit Sales

1 5,000

2 6,000

3 7,000

4 8,000

The new bat would be priced at $225.00 per unit. The variable cost per unit will

be $110.00, and fixed cost will be $42,000.00 per year. The new bat will require

$30,000.00 in new net working capital at the start.

It will cost $780,000.00 to buy the equipment necessary to begin production. In

addition, the equipment will cost $40,000.00 to setup. The equipment will be

classified as three year MACRS property. The equipment will have a salvage

value of $10,000.00 at the end of the four years. The firms marginal tax rate is

35% and its weighted average cost of capital is 12%. Using the NPV method of

analysis, determine whether the firm should undertake the proposed project.

Why or why not? Bonus, what is the IRR on the proposed project?

Additional information: Depreciation Table

Year 3 Year Property

1 33.33%

2 44.44%

3 14.82%

4 7.41%

Please just don't send me a picture otherwise, it will be a trouble for me to copy and paste, thank you.