Scenario Analysis You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphitelike material in its tennis rackets. The company has estimated the...

Scenario Analysis You are the financial analyst for a tennis racket manufacturer. The company is considering using a graphitelike material in its tennis rackets. The company has estimated the information in the following table about the market for a racket with the new material. The company expects to sell the racket for six years. The equipment required for the project will be depreciated on a straight-line basis and has no salvage value. The required return for projects of this type is 13 percent and the company has a 21 percent tax rate. Should you recommend the project? Pessimistic Expected Optimistic Market size Market share Selling price Variable costs per unit Fixed costs per year Initial investment 110,000 20% $ 139 $    77 $   975,000 $2,300,000 120,000 23% $ 143 $ 73 $   920,000 $2,150,000 132,000 25% $ 147 $ 70 $  890,000 $1,950,000