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Dwayne Security Network Ltd.(DSN) is a producer of many alarm systems including, fire alarms, home,...

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Accounting

Dwayne Security Network Ltd.(DSN) is a producer of many alarm systems including, fire alarms, home, and personal security systems. (DSN) has already invested $1.8 million dollars into research and development connected with the design and production of a new super-security system involving high-resolution surveillance cameras. DSN is now considered a leader in the field. DSN believes that the competitive advantage, by bringing this product to market now, will last 5 years. The vicepresident in charge of finance has provided you with the following data and worksheet and asked you to determine, using an NPV analysis, if the new product should be brought to the market. She has also hinted that your future with the company hinges on a successful analysis of the project.
Data Sheet:
Company's effective tax rate =32%
Company's cost of capital =15%
Inventory worth $600,000 must be established immediately. Inventories each year will rise by $200,000 in each of the first 2 years of the project, at which time it will level out until the end of year 4 and then drop $200,000 for the duration of the project. Cash must also be available. Cash requirements in each year of the project if it is accepted, are:
\table[[Year 0,$0
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