Using the information in the following table, the CFO will conclude that ASC should

$q,$

ASC, Inc. is considering the production of a new line of soft drinks at its Springfield, IL plant. The CFO of ASC, Inc, is provided with the following information on the new project:

The expansion will require the immediate purchase of new machinery for $$39,000,000.$

The firm has spent $$1,000,000$ to train workes to use the new machinery.

The incremental sales from this project are expected to be $$21,300,000$ per year. The incremental operating expenses $($exclading depreciation$)$ are expected to equal $$11,300,000$ per year.

The company uses strigh$-$line depreciation. The project has an economic life of $20$ years. The machinery has a salvage value of $$1,000,000$ and will be sold for that amount at the conclusion of the project.

The company will increase net working capital by $$1,200,000$ at the beginning of the project, and it will be liquidated at the end of the project.

ASC Inc,$\text{'}$s marginal tax rate is $40\%.$

ASC Inc.$\text{'}$s weighted average cost of capital $($WACC$)$ is $14\%.$

$$

accept the project since NPV $>0$

reject the project since the payback period is less than $20$ years

reject the project since NPV $<mn\; id="EditorElement\_5576840">0</mn>$

accept the project since the payback period is greater than $20$ years

accept the project since the revenues were increased