To address the housing crisis, the City of Calgary has offered an incentive to builders in the form of an investment tax credit (ITC) of 15% on start-up equipment purchases to be realized in year 1. Your company is considering a project to build four small apartment buildings a year for the next five years. This project requires the purchase of $900,000 of equipment which will be depreciated at a CCA rate of 30% over the next five years. The equipment can be sold at the end of the project for $200,000 (dont forget to consider gains or losses due to tax). The labour costs are expected to be $100,000 per year, fixed costs will be $175,000 a year and the materials will be $140,000 per building per year. Each apartment building is expected to sell for $300,000 after completion. Your company expects to need $20,000 in net working capital each year of the project and expects to recover it all at the end. Your firm plans to fund this project through borrowing $1,000,000 at the start of the project at a rate of 8%. It plans to pay it off in equal annual installments across five years. Your required rate of return is 12% for this project. The tax rate is 40%. Should the project be accepted based on the NPV and IRR?