XYZ Ltd$.$ is considering the introduction of a new product. If is estimated that profits before depreciation would increase by $1,20,000$ each year for first four years and $60,000$ each for the remaining period. An advertisement cost of $20,000$ is expected to be incurred in the first year, which is not included in the above estimate of profits. The cost will be allowed for tax purpose in the first year.

A new plant costing $2,00,000$ will be installed for the production of the new product. The salvage value of the plant after its life of $10$ years is estimated to be $40,000.$ A working capital investment of $20,000$ will be required in the year of installing the plant and a further $15,000$ in the following year. The company's tax rate is $30\%$ and it claims written down value depreciation at $33\mathrm{.}33\%.$ If the company's required rate of return is $20\%,$ should the company introduce the new product? Ignore tax effect on Profit$/$Loss on sale of asset.