You are graduating in June and would like to start your own business manufacturing

clothes printers. You collect the following information on the initial costs:

Cost of Plant and Equipment $=$ $ $500000$

Licensing and Legal Costs $=$ $ $50000$

You can claim an investment tax credit of $10\%$ on plant and equipment. You also have been

left a tidy inheritance that will cover the initial cost, and your estimated opportunity cost is

$10\%.$ You estimate that you can sell $1$ million clothes a year at $$1$ a garment. You estimate

your costs as follows:

Variable costs$/$fabric $=50$ cents

Fixed Costs$/$ year $=$ $ $200000$

Adding up state, income, and other taxes, you note that you will be in the $30\%$ tax bracket.

To be conservative, you assume that you will terminate the business in $5$ years and that you

will get nothing from the plant and equipment as salvage $($you also use straight line

depreciation$).$ As a final consideration, you note that starting this business will mean that

you will not be able to take the investment banking job you have been offered $($which offered

$ $75000$ a year for the next $5$ years$).$ Should you take on the project?