Hermione, is an entrepreneur that opened a pizza restaurant five years ago. She is considering investing to expand her operations. The property next door is for sale, so she is evaluating whether she should purchase that property. Hermione has hired you to help her with the financial analysis of this potential expansion project. As you$$re putting your $10-$year projections together, you estimate the following:

The up$-$front cost of the new building, construction, and kitchen remodeling will be $$5,550,000,$ and will take approximately one year. You estimate this can be depreciated over the first $5$ years, using the following accelerated annual depreciation schedule: $35\%,30\%,20\%,10\%,$ and $5\%.$ Year $1$ will have a sales reduction of $$850,000$ relative to not doing the expansion. $$ Years $2$ through $10$ will have an increase in sales of $$900,000$ in year $2,$ growing by $8\%$ per year. $$ Costs will increase by $$25,000$ in year $2,$ growing by $5\%$ per year. $$ NWC investment of $$350,000$ today $($recovered at the end$).$ Salvage value of $$1,750,000$ at the end. $$ Tax rate of $29\%.$ The appropriate discount rate is $14\%$

Using your assumptions, find the NPV of the restaurant expansion. What is your recommendation to Hermione?