Suppose a firm is considering a labor-saving investment. In year 0, the project requires a $11,700 investment in equipment (all figures are in thousands of dollars). This investment is depreciated using the straight-line method over five years and there is salvage value in year 5 of $4,500. With or without the cost-reducing investment, all cash flows start in year 1 and end in year 5. The inflation rate is 3.0% in year 2 and declines to 1.2% in year 5.

The real growth rate is 22.3% in year 2 and declines to 8.3% in year 5. The tax rate is 41.0% in all years. The real cost of capital is 9.1% in year 1 and declines to 7.2% in year 5. Without the cost-reducing investment, the firm's existing investments will generate year 1 revenue, labor costs, other cash expenses, and depreciation of $15,200, $4,100, $5,300, and $3,300, respectively. With the cost-reducing investment, the firm's year 1 labor costs will be $1,600 and revenues and other cash expenses will remain the same.

What is the cost-reducing project’s NPV?