Nike is evaluating a project for new $$Dr$.$ Bryant$$ shoe with the following details. Your job as their PAID consultant is to evaluate the project and determine if they should accept it$.$

The details are as follows:

The initial cost for capital assets $($and depreciable basis$)$ is $$10,000,000.$ This asset falls into the $10-$year asset class as determined by the IRS. It will be depreciated on a straight$-$line basis.

The incremental Net Working Capital needed will be $$500,000($Assume the $$easy$$ way of managing this NWC$)$

The salvage value at the end of the project is projected to be $$0\mathrm{.}00$

The life of the project will be $10$ years

Operations:

Projected Unit price: $$100\mathrm{.}00$

Projected $($Annual$)$ Unit sales: Quantity of $30,000$

Projected Annual Cost of Goods Sold: $$600,000$

Sales and General Admin Costs: $$200,000$

The firms marginal tax rate: $35\%$

Nike has no debt

Assume that similar projects like this have a required rate of return of $10\%$

Your job is to determine if Nike should accept this $$Dr$.$ Bryant Shoe$$ project. It's probably the best shoe ever! :$-)$

Please use NPV to determine your decision. Use excel to show answers and calculations.