Zimlick, Inc, a US pasta$-$machine manufacturer, is considering a $$2\mathrm{.}1$ million device from United Technologies Corporation to automate pasta$-$machine quality inspection.

The device will be depreciated according to the straight$-$line method over three years. The useful life of the device is $5$ years, with an estimated sale value at year $5$ of $$300,000.$ The project will allow less pasta machines to be scrapped because of low quality, generating pretax earnings of $$900,000$ per year, and will not change the risk level of the firm. Zimlick$$s cost of capital is $18\%.$ The tax rate is $30\%.$

Q$1.$ Show a forecast of the cash flows for the project

Q$2.$ What is the net present value of the project?

Q$3.$ What is the IRR of the project?

Q$4.$ Would you undertake the investment? Why or why not?