You have been asked by the president of Ellis Construction Company, headquartered in Toledo, to evaluate the proposed acquisition of a new earthmover. The mover$$s basic price is $$750,000,$ and it will cost another $$100,000$ to modify it for special use by Ellis Construction. The mover falls into the MACRS $5-$year class. It will be sold after $5$ years for $$200,000,$ and it will require an increase in working capital $($spare parts inventory$)$ of $$50,000,$ which will be recovered in full at the end of the project$$s life. The earthmover purchase will have no effect on revenues, but it is expected to save Ellis $$420,000$ per year in before$-$tax operating costs. Ellis$$s marginal tax rate is $30\%.$ The cost of capital $($discount rate$)$ is $11\%.$ Use the following $5-$year MACRS schedule: $20\%,32\%,19\mathrm{.}2\%,11\mathrm{.}52\%,11\mathrm{.}52\%,$ and $5\mathrm{.}76\%.$

Compute the NPV and IRR of the project. Would you ask the president to buy the equipment?