V(A) Snow Motor Company is planning to produce an electric-powered low-rider truck, targeted at sophisticated, well-to-do middle-aged consumers in New England. The trucks will be available in two colors; purple and pink. Tinted windows and 500-watt stereo system come as standard, but a shotgun rack in the back is available only as an option. The development costs for the car are estimated at $2,000,000. For the next five years, the company estimates that 250 units will be sold per year, at a price of $15,000. Per unit manufacturing cost is $8,000 (CGS per car). Fixed costs are estimated at $ 120,000 per year. The development costs will be fully depreciated on a straight-line basis over 5 years. The tax rate is 40%. Snow Motor requires a 20% return on all projects.

Required:

Calculate the projects net investment and cash flows for year 0 - 5. Also calculate NPV. Would you accept the project?