Suppose, as a consideration separate from the Base Case project, you estimate the cash flows below for a small product line that is unrelated to your current lines of operation. You have also identified the additional data below for two firms that compete in the product line under consideration. Assume you have determined your firms Dividend Discount Model data to be irrelevant to this analysis.

Question 1.4 (10 points):

Should you undertake this new product line? Substantiate your answer using NPV.

Year	Estimated Cash Flow		PB Company
0	$(560,000)		D/E	0.45
1	$73,549		Beta	1.70
2	$118,650		Tax Rate	20%
3	$127,500
4	$133,420		J Company
5	$140,790		D/E	0.30
6	$148,635		Beta	1.58
			Tax Rate	34%

all information given