Liston, Inc., owns a factory located close to, but not inside, a foreign trade zone. The plant imports volatile chemicals that are used in the manufacture of chemical reagents for laboratories. Each year, Liston imports about $16,400,000 of chemicals subject to a 30% tariff when shipped into the United States. About 15% of the imported chemicals are lost through evaporation during the manufacturing process. In addition, Liston has a carrying cost of 8% per year associated with the duty payment. On average, the chemicals are held in inventory for 9 months.

Assume that Liston is considering building a new plant inside a foreign trade zone to replace its chemical manufacturing plant.

1. How much duty will be paid per year by the factory located inside the foreign trade zone? $

2. How much in duty and duty-related carrying costs will be saved by relocating inside the foreign trade zone?$