Your career is sky rocketing at this new company.Hank Skully calls you and asks how come you are doing so well when he was a failure at this company.You explain to Hank that his poor decisions during his college days of not studying and working hard to understand Finance and Accounting led to his termination.You convince Hank to go back to school and commit to behaving in an ethical manner from now on.

You are given another important project to work on.Based on the information below you are to calculate the Net Present Value of the cashflows.

This project will run for six years and will require an initial investment of $16 million for new equipment.At the end of the six years, this equipment can be sold for $90,000.The initial working capital required will be Inventory of 2 million Accounts Receivable of $1 million and Accounts Payable of $1 million.

You have contacted CRA and determined that the asset class for this equipment is Class 3 (CCA rate 5%).You also confirm that the company's tax rate is 30%.

The company forecasts that they can sell their new products at a price of $210, and that the variable cost of each unit sold is $105.

The required rate of return for this project is 29%

Below are the forecasted unit sales and Fixed costs for this project.

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Forecasted Unit Sold

56,000

85,000

105,000

146,000

225,000

199,000

Fixed Costs

400,000

400,000

400,000

400,000

400,000

400,000

Calculate the NPV of the cashflows should the company accept this project? Your manager would like to know if the NPV is zero what should the company do and why?