A company considers to buy a factory of Zalando. The purchaseprice is €1 million and has to be paid at January 1, 2019. Thefactory has a lifetime of 4 years and is sold at the end of 2022for a cash inflow after tax for €400,000. The factory will bedepreciated in equal amounts in 4 years, so €150,000 per year. Thefactory has the following net sales forecasted: 31-12-201931-12-2020 31-12-2021 31-12-2022 Sales €350,000 €400,000 €450,000€300,000 Note that at the end of 2019, the factory needs to investan additional €90,000 in cash in a large warehouse to support itssales (it is running for three years). The residual value at theend of the lifetime is zero. This warehouse is depreciated in equalamounts, so €30,000 per year. There are no other operational costs(zero). The tax rate is 25% and for this warehouse the weightedaverage cost of capital of Zalando is taken into account at 8%.Assume that all cash flows (in or out) are at the end of the year.Only the investment outlay of €1 million is at the beginning of theyear. What is the NPV (net present value) for this project atJanuary 1, 2019? Should management decide to accept or reject theinvestment in the warehouse: Explain your answer with the help ofthe NPV-decision rule.