Question: You are considering a project that will produce an operating cash flow of $120,000 a year for three years. You need to buy an equipment

 You are considering a project that will produce an operating cash

You are considering a project that will produce an operating cash flow of $120,000 a year for three years. You need to buy an equipment that costs $300,000 and is expected to be depreciated straight-line to zero at the end of year 3 . The project will require a net working capital of $1,000 in year 0,$1,000 in year 1,$1,000 in year 2,$0 in year 0 . The equipment can be sold at the end of the project for $50,000 and the corporate tax rate is 21%. Using the NPV rule at a discount rate of 15%, should you accept or reject this project? Why? (Please round, if necessary, your final answer to two decimal places)

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