Parker Products manufactures a variety of household products. The company is considering introducing a new detergent. The company$$s CFO has collected the following information about the proposed product

$$ The project has an anticipated economic life of $4$ years.

$$ The company has already spent already spent $$100,000$ on in market research to determine

feasibility of the product.

$$ The company will have to purchase a new machine to produce the detergent. The machine has

an up$-$front cost of $$2$ million. The machine will be depreciated on a straight$-$line basis to $$0$ over $4$ years. The company anticipates after four years, it will be able to sell the machine for $$200,000.$

$$ To start the project, it will require $$60,000$ of additional inventory and $$40,000$ for additional

accounts receivable. Short$-$term payables are expected to increase by $$20,000.$ The net working

capital will decline by one$-$fourth of the original amount each year until it returns to its original

level at the end of the project $($i$.$e$.$ there will be no NWC left after the fourth year$).$

$$ The detergent is expected to generate sales revenue of $$3$ million per year for each of the four

years. Variable operating costs are expected to equal $50$ percent of sales revenue. Fixed

operating costs total $$500,000.$

$$ The new detergent is expected to reduce after$-$tax cash flows of the company$$s existing products

by $$300,000$ a year.

$$ The company has a $12$ percent required return.

$$ The company has a marginal tax rate of $30$ percent.

What is the net present value of the proposed project? Should you accept or reject the project?