Question: 2 3 4 5 . We project unit sales for a new household laser-guided cockroach search and destroy system as follows: Year 1 Unit Sales

 2 3 4 5 . We project unit sales for a

2 3 4 5 . We project unit sales for a new household laser-guided cockroach search and destroy system as follows: Year 1 Unit Sales 53,000 65,000 76,000 86,000 46,000 The new system will be priced to sell at $95 each. The cockroach eradicator project will require $585,000 in net working capital to start, and total net working capital will rise to 30% of sales. The net working capital will be zero at the end of the project. The variable cost per unit is $60, and total fixed costs are $25,000 per year. The equipment necessary to begin production will cost a total of $6.5 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 30% of its cost. The relevant tax rate is 40%, and the required return is 20%. Based on these preliminary estimates, what is the NPV of the project

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