Your firm is considering a new project that will increase sales as described below. The project will cost $1,000,000 including installation and will be depreciated 3-year MACRS. Variable costs run 25% of sales, fixed costs are $10k in year 1-3 and $20k in years 4-5. While the equipment will depreciated to $0, it can be sold for $100k at the end of year 5. An initial increase of $50k of net working capital will be necessary, but no further additions. The firm's marginal tax rate is 35% and they use a 10% discount rate. Should they accept this project? Why or why not? Year Price $100 $120 $120 $125 Quantity 10,000 11,000 12,000 11,000 8000 $100