QUESTION $1$

Frank Einstein Co$.$ is a firm that specializes in selling Halloween decorations. It is evaluating a new project that requires an initial investment of $$1\mathrm{.}42$ million. The asset will be depreciated to zero over its $3-$year life. The company's analysts estimate that in the first year, the project will generate $$1\mathrm{.}09$ million in revenues. The revenue will increase by $7\%$ per year in the following two years. The costs in the first year will be $$475,000$ and they will increase by $5\%$ per year thereafter. The corporate tax rate is $25\%$ and the required return is $12\%.$ What is the NPV of the project?