Question: A project costs $800,000 plus $200,000 in shipping and installation. For the next five years the project is expected to generate $500,000 in sales &

A project costs $800,000 plus $200,000 in shipping and installation. For the next five years the project is expected to generate $500,000 in sales & 200,00 in costs. The project is being depreciated straight line over five years ($200,000 per year). The firm's tax rate is 40% and K = 10%.

Find the NPV.

Should the project be undertaken?

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