Initial investment outlay of $40 million, consisting of $35 million for equipment and $5 million for net working capital (NWC) (plastic substrate and...

• Initial investment outlay of $40 million, consisting of $35 million for equipment and $5 million for net working capital (NWC) (plastic substrate and ink inventory); NWC recoverable in terminal year 
• Project and equipment life: 5 years 
• Sales: $27 million per year for five years 
• Assume gross margin of 50% (exclusive of depreciation) 
• Depreciation: Straight-line for tax purposes 
• Selling, general, and administrative expenses: 10% of sales 
• Tax rate: 35%

Assume a WACC of 10%.

Compute the project's IRR and NPV.

Should the project be accepted? Why or why not?