Mars Inc. is considering replacing an old machine. The machine purchased 2 years ago, is being depreciated on a straight-line basis and has four years of remaining life. Its current book value is $4,000, and it can be sold for $5,000 at this time. Thus, the annual depreciation expense is $4,000/4 = $1,000 per year. If the old machine is not replaced, it can be sold for $900 at the end of its useful life. Mars is considering the purchase of a new machine which costs $20,000 and has an estimated useful life of 4 years with an estimated salvage value of $1,200. The machine falls into the MACRS 3-year class (33%, 45%, 15%, 7%). The machine will reduce manufacturing costs by $7,000 annually. The machine would require an increase in net working capital by $2,000 when the machine is installed, but required working capital will return to the original level when the machine is sold after 4 years. Mars's marginal tax rate is 40 percent, and it uses a 14 percent cost of capital to evaluate projects of this nature.

What is the NPV of the replacement project?

Enter only numbers, that is, if the answer is $12.67, then just enter 12.67 (enter two decimals).