7.20 International Buckeyes is building a factory that can make 1 million buckeyes a year for five years. The factory costs $6 million. In year 1, each buckeye will sell for $3.15 in nominal terms. The price will rise 5 percent each year in real terms. During the first year variable costs will be $0.2625 per buckeye in nominal terms and will rise by 2 percent each year in real terms. International Buckeyes will depreciate the value of the factory to zero over the five years by use of the straight-line method. International Buckeyes expects to be able to sell the factory for $638,140.78 at the end of year 5 (or $500,000 in real terms). The nominal discount rate for risky cash flows is 20 percent. The nominal discount rate for riskless cash flows is 11 percent. The rate of inflation is 5 percent. Cash flows, except the initial investment, occur at the end of the year. The corporate tax rate is 34 percent; capital gains are also taxed at 34 percent. What is the net present value of this project?