Problem 3-10 (Algo) The Tuff Wheels was getting ready to start its development project for a new product to be added to its small motorized vehicle line for children. The new product is called the Kiddy Dozer. It will look like a miniature bulldozer, complete with caterpillar tracks and a blade. Tuff Wheels has forecasted the demand and the cost to develop and produce the new Kiddy Dozer. The following table contains the relevant information for this project. Development cost $1 , 550, 000 Estimated development time 9 months Pilot testing 200, 000 Ramp-up cost 400 , 000 Marketing and support cost 150 , 000 per year Sales and production volume 60, 000 per year Unit production cost $ 100 Unit price 235 Interest rate 8 8 Tuff Wheels also has provided the project plan shown as follows. As can be seen in the project plan, the company thinks that the product life will be three years until a new product must be created. PROJECT SCHEDULE YEAR 1 YEAR 2 YEAR 3 YEAR 4 KIDDY DOZER Development Pilot Testing Ramp-up Marketing and Support Production and Sales Assume all cash flows occur at the end of each period. a. What is the net present value (discounted at 8%) of this project? Consider all costs and expected revenues. (Enter your answer in thousands of dollars. Perform all calculations using Excel. Do not round any intermediate calculations. Round your answer to the nearest thousand.) Net present value