Hiland Inc. manufactures snowsuits. Hiland is considering purchasing a new sewing machine at a cost of $2.45 million. Its existing machine was purchased five years ago at a price of $1.8 million; six months ago, Hiland spent $55,000 to keep it operational. The existing sewing machine can be sold today for $242,948. The new sewing machine would require a one-time, $85,000 training cost.

Operating costs would decrease by the following amounts for years 1 to 7:

Year 1 $389,700

2 399,600

3 410,600

4 425,300

5 433,500

6 434,600

7 437,800

The new sewing machine would be depreciated according to the declining-balance method at a rate of 20%. The salvage value is expected to be $379,300. This new equipment would require maintenance costs of $98,500 at the end of the fifth year. The cost of capital is 9%.

Calculate the net present value.