James Stock is the CFO of Gold Water Company (GWC) and wants to purchase a newly discovered island in Lake Superior. The island contains a small lake that has an aquifer that extends below the depths of Lake Superior. This aquifer has superior water in it and GWC hopes to bottle it and sell it throughout the world. Bottling will occur directly on this island. The state of Michigan owns the island and has offered to sell it to GWC for $4 million. GWC also faces additional initial equipment and machinery costs of $12 million. GWC is an environmentally aware firm and has agreed to return the island to its current natural condition. The water would be extracted for four years and although the commodity will be sold throughout the world, all cash flows are denominated in US dollars. The following information has been made available to Stock: Year Revenues Operating Expenses (Excluding Depreciation) 2 $22 million $24 million $26 million $30 million $16 million $17 million $20 million $22 million The total initial cost will be financed with a $8 million bond issue and the remaining capital will be raised with a common stock issue. The bond will have a coupon rate of 4.8%, four years until maturity, and a price of $983. The shares of GWC will pay a year one dividend of $1.15 per share. The growth rate in dividends is expected to be 3.1%. Current GWC stock price is $16.92. The following is a list of other relevant information: GWC pays a marginal corporate tax rate of 20%; the depreciation percentages (which are relevant for the equipment) are 40% in year one and 30% each in years two and three. Remember that land cannot be depreciated, and GWC will spend $2 million building a park and planting trees at the end of the project. GWC also intends to use the operating cash flow in year four to purchase another island off the coast of Maine that is owned by a Canadian firm for CAD 3 million. The current spot rate is CAD1.18/USD. The GWC economist expects the exchange rate to be USD 0.815/CAD in four years. Determine the net present value in US dollars for this capital budgeting project.