The managers of Classic Autos Incorporated plan to manufacture classic Thunderbirds$(1957$ replicas$).$ The necessary foundry equipment will cost a total of $$$$4,200,000$ and will be depreciated using a$$ five$-$year MACRS$$ life, Projected sales in annual units for the next five years are $310$ per year. If the sales price is $ $26,000$per$$ car, variable costs are $$$$16,000$ per$$ car, and fixed costs are $$$$1,300,000$annually$,$ what is the annual operating cash flow if the tax rate is $40\%?$

The equipment is sold for salvage for $$$$500,000$ at the end of year five. What is the$$ after$-$tax cash flow of the$$ salvage? Net working capital increases by $$$$625,000$ at the beginning of the project$($year $0)$ and is reduced back to its original level in the final year. What is the incremental cash flow of the$$ project? Using a discount rate of $13\%$ for the$$ project, determine whether the project should be accepted or rejected according to the NPV decision model.