As a Financial analyst, you must evaluate a proposed project to produce printer cartridges. The equipment would cost $55,000, plus 10,000 for installation. Annual sales would be 4,000 units at a price of $50 per cartridge, and the projects life would be 3 years. Current assets would increase by $5,000 and Payables by $3,000. At the end of 3 years, the equipment could be sold for $10,000. Depreciation would be based on the MACRS 3 year class; so the applicable rates would be 33%, 45%, 15%, and 7%. Variable cost would be 70% of sales revenue, fixed cost excluding depreciation would be $30,000 per year. The marginal tax rate is 40%. The corporate WACC is 11%.