Harkins Co. needs to update its equipment to meet regulatory standards. This mandatory update will require a $2,400,000 initial investment in fixed assets. These assets will be depreciated straight-line to zero and will have no value after its useful life. The benefit of the mandated upgrade is that it should generate $1,200,000 in additional sales with costs of $300,000 per year during the 3-year period. Harkins Co. has a tax rate of 20%, and a required rate of return of 8%.

What is the NPV of this project? What is the EAC?