In your new role as the Chief Financial Officer of Clean Water Solutions Co, it is your responsibility to oversee a new water filtration project that is expected to last the next 7 years. The company is considering investing in a new water filter for refrigerators that will be priced at $65 each, while variable costs for producing each filter are $22. Initial estimates suggest that the company will sell 800,000 units in the projects first year, and the number of units sold is expected to increase by 20,000 units annually. The selling price per unit is expected to decrease by $3 per year due to the release of newer versions. Variable costs per unit are also expected to decrease annually due to efficiency gains in the production process. Estimates suggest that variable costs will decrease by $0.75 per year.

Fixed costs for the project are expected to be $5 million per year. Moreover, the company will need to invest a total of $100 million in fixed assets. Clean Water Solutions Co. uses two forms of depreciation for its fixed assets. The company uses straight-line depreciation on its income statements, which assumes that the fixed assets are 100% depreciable. Meanwhile, the company uses the Modified Accelerated Cost Recovery System (MACRS) for tax purposes when determining the tax implications on the sale of its fixed assets. Assume that the fixed assets are classified as 10-year property under MACRS:

Depreciation Year	10-Year MACRS
1	10.00%
2	18.00%
3	14.40%
4	11.52%
5	9.22%
6	7.37%
7	6.55%
8	6.55%
9	6.56%
10	6.55%
11	3.28%

At the end of the fifth year, the company anticipates that it will sell this equipment for $40 million before taxes. Assume that the company is in a 21% corporate tax bracket. The company will also require an additional investment of $10 million in net working capital, and 100% of this investment will be recovered at the end of the seventh year.

The following information is also applicable. The firm has 370,000 bonds outstanding with each bond currently trading at 98.4 percent of face value. The firms outstanding bonds each have a face value of $1,000, mature in 12 years, have a coupon rate of 3.6 percent, and pay interest semi-annually. The firm also has 1.5 million shares of common stock outstanding that are trading at $91 per share. The firm expects to pay an annual dividend of $12.10 per share next year and anticipates that dividends will grow at 3.5% annually for the foreseeable future. Finally, the firm has 590,000 shares of 6.5% preferred stock outstanding that are priced at $90 per share. The preferred stock has a face value of $100 each.

Based on the assumptions above, what is the net present value of this project? Should it be accepted or rejected based on the net present value?