Kramerica Industires plans to introduce a new product to the market. Last week, Kramerica hired a marketing firm to develop a TV ad for the product. The marketing firm will develop the ad regardless of Kramerica's decision to continue the project or not. The project will require additional working capital of $$300,000$ which will be recovered at the conclusion of the project. The firm has spent $$250,000$ on R&D for this project. To launch the project Kramerica will have to invest $$26$ million today in plant and machinery. The plant and machinery have an economic life of $20$ years and a salvage value of $$4$ million. The project is expected to generate sales of $$9$ million per year for $20$ years. Of these, $20\%$ are due to lost sales of the existing products of the company. The incremental variable costs of producing the product is $$3\mathrm{.}4$m$.$ Fixed costs are $$700,000$ per year. Kramerica's accountants have allocated $$400,000$ in managerial salaries to the project but no additional managers need to be hired. The company uses straight line depreciation. It has a marginal tax rate of $40\%$ and a $10\%$ cost of capital.

The initial cash flow at time $0($t$=0)$ is $-$$$\_\_\_\_\_\_.$

Question $7$ options:

$25,700,000$

$26,700,000$

$27,700,000$

$26,300,000$

$27,300,000$