Your company has been doing well, reaching $2 million in earnings, and is considering launching a new product. Designing the new product has already cost $800,000. The company estimates that it will sell 300,000 units per year for $12 per unit and variable non-labor costs will be $6 per unit. Production will end after year 4. New equipment costing $2.5 million will be required. The equipment will be depreciated to zero using the 7-year MACRS schedule. You plan to sell the equipment for book value at the end of year 4. Your current level of working capital is $100,000. The new product will require the working capital to increase to a level of $130,000 immediately, then to $160,000 in year 1, in year 2 the level will be $180,000, in year 3 the level will be $140,000, and finally in year 4 the level will return to $100,000. Your tax rate is 35%. The discount rate for this project is 10%. As the manager of the company, should you launch the new project? Year 0 1 2 3 4 5 6 7 MACRS Depreciation 14.29% 24.49% 17.49% 12.49% 8.93% 8.92% 8.93% 4. Schedule