Problem $10-35$ Cash Flows and NPV $($LO$2)$

We project unit sales for a new household$-$use laser$-$guided cockroach search and destroy system as follows:

Year Unit Sales

$199,000$

$2111,000$

$3134,000$

$4140,000$

$593,000$

The new system will be priced to sell at $$455$ each.

The cockroach eradicator project will require $$1,800,000$ in net working capital to start, and total net working capital will rise to $15\%$ of the change in sales. The variable cost per unit is $$325,$ and total fixed costs are $$2,100,000$ per year. The equipment necessary to begin production will cost a total of $$20$ million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of $20\%.$ In five years, this equipment will actually be worth about $20\%$ of its cost.

The relevant tax rate is $35\%,$ and the required return is $19\%.$ Based on these preliminary estimates, what is the NPV of the project? $($Enter the answer in dollars. Do not round your intermediate calculations. Round the final answer to $2$ decimal places. Omit $ sign in your response.$)$

What is the NPV$?$ $