Blue Angel, Inc., a private firm in the holiday gift industry, is considering a new project. The company currently has a target debt"?oequity ratio of .48, but the industry target debt"?oequity ratio...

Blue Angel, Inc., a private firm in the holiday gift industry, is considering a new project. The company currently has a target debt"?oequity ratio of .48, but the industry target debt"?oequity ratio is .38 The industry average beta is 1.1. The market risk premium is 8 percent, and the risk-free rate is 5.7 percent. Assume all companies in this industry can issue debt at the risk-free rate. The corporate tax rate is 55 percent. The project requires an initial outlay of $485,000 and is expected to result in a $90,000 cash inflow at the end of the first year. The project will be financed at Blue Angel's target debt"?oequity ratio. Annual cash flows from the project will grow at a constant rate of 5.7 percent until the end of the fifth year and remain constant forever thereafter.

Required:

(a) Calculate net present value. (Do not include the dollar sign ($). Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16))

Net present value $ ______________

(b) Should Blue Angel invest in the project? (Yes/No)