The Pixar Corporation has an opportunity to sell Buzz Lightyear flying action figures. Woody, the CEO, would like for Rex, the vice president, to evaluate the project. Mr$.$ Potato Head, operations manager, believes the equipment will cost $$700,000$ with shipping and installation being another $$70,000.$ Mr$.$ Potato Head believes the cost will be $$3\mathrm{.}50$ per unit or $35\%$ of sales plus a fixed cost of $$50,000.$ Mr$.$ Potato Head estimates inventory will be increased by $$80,000.$ Mr$.$ Potato Head believes after the three$-$year run of action figures, the equipment will be worth $$375,000.$ Bo Peep, marketing manager, believes that the demand for the Buzz Lightyear flying action figures will be $90,000$ units in the first year, $75,000$ in the second year, and $60,000$ units in the third year. Bo Peep tells Rex that she believes the price will be $$10$ per unit. Slinky Dog, the CFO, says the equipment will fall under the $3-$years MACRS schedule. Slinky Dog believes accounts payable will increase by $$35,000$ and accounts receivable will increase by $$40,000.$ Slinky Dog tells Rex that the corporate tax rate is a flat $40\%.$ Hamm, assistant financial accountant, says the required return on a project of this type should be $($Use WACC$).$

Pixar Corporation stock sells for $$40.$ They plan to pay $$3\mathrm{.}75$ in dividends next year. They are expected to grow at $8\mathrm{.}75\%.$ Treasury bonds yield $3\mathrm{.}5\%.$ The market is expected to return $11\mathrm{.}5\%.$ They have a beta of $1\mathrm{.}83.$ Their bonds sell for $$1090.$ They have $15$ years till maturity. They pay semi$-$annual payments. Par is $$1000.$ The coupon rate is $8\%.$ What is the NPV$,$ IRR, Payback, WACC and the accept$/$reject decision to Woody.