A company owns a piece of land and they are considering taking up a new 5-year project on it or selling it now for $50,000. The project would require to buy a machine for $600,000 that could be used for 5 years (depreciated using the straight-line method over its useful life) and $100,000 to be invested into working capital (to be recovered at the end of the project). The operating income (before depreciation and tax) from using the machine would be $200,000 each year for 5 years. The tax rate for this company is 20% and the required rate of return is 10%. 

Compute the initial investment (I) and the predicted cash flows for the project (CF(1) – CF(5)). 

Determine if the project should be accepted.