A company is considering the acquisition of production equipment which will reduce both labor and materials costs. The cost is $

$1$

$1$

$0$

$,$

$0$

$0$

$0$

$$and it will be depreciated on a straight

$-$

line basis down to $

$0$

$.$

$$The useful life of the equipment is five years, and it will have a $

$2$

$0$

$,$

$0$

$0$

$0$

$$market value at the end of five years. Operating costs will be reduced by $

$3$

$0$

$,$

$0$

$0$

$0$

$$in the first year and the savings will increase by $

$5$

$,$

$0$

$0$

$0$

$$per year in years

$2$

$,$

$3$

$,$

$$and

$4$

$.$

$$Due to increased maintenance costs, savings in year five will be $

$1$

$0$

$,$

$0$

$0$

$0$

$$less than the year four savings. The equipment will also reduce net working capital by $

$5$

$,$

$0$

$0$

$0$

$$throughout the life of the project. The firm's tax rate is

$3$

$5$

$$percent$,$ and the required return is

$1$

$6$

$$percent$.$ What is the NPV of this project?