The Edmonton Fabricating Company {EFCj manufactures snow blowers. EFC is investigating the feasibility of a new line of cordless snow blower. The new manufacturing equipment to produce the new line of snow blower will cost $00,000. The installation costs are expected to be 55 01000, the setup costs are expected to be 330,000 and the training costs are expected to be $20,000. The company has just finished a marketing feasibil'rty and this study strongly endorses going ahead with a further financial study to evaluate the overall feasibil'rty of the project. The cost of the marketing study was 550,000. The projected useful life of the new equipment is 5 years and the project unit sales are expected to be: 4.0:\") The new cordless snow blower would be priced to sell at 5300 per unit and the variable operating costs are expected to be 55% of sales. After the rst yean the sales price is estimated to increase by 2% every year. The total fixed operating costs are expected to be 31501000 per year and would remain constant over the life of the project. The project would require 540,000 in working capital at the start {time period zero). The entire amount of working capital will be recovered at the end of the project. The estimated salvage value of the equipment after 8 years is 51501000. The marginal tax rate is 40%. The CCA rate of the equipment is 20%. The company uses the DCF model to determine the cost of retained earnings and new common stock You have been provided with the following data: 00 = $0.80; P0 = 52250: g = 5.00% {constantj and F=9.00%. The company's 9.25% coupon rate, semi-annual payment; $1,000 par value bond that matures in 20 years sells at a price of 51,0?5. The new bonds would be privately placed with no otation costs. The target capital stmcture is 40% debt, 40% common equity [retained earnings) and 20% common equity {new common stock]. REQUIRED: What is the net present value of this project? Should the project be undertaken by Edmonton Fabricating Company {E FE]