Sally Omar is the manager of the office products division of Wallace Enterprises. In this position, her annual bonus is based on an appraisal of Wallace Enterprises. In this position, her annual bonus is based on an appraisal return on investment (ROI) measured as Division Income/End-of-the-year division assets (net of accumulated depreciatiion).

Currently, Sally is considering investing $40,000,000 in modernization of the division plant in Tennessee. She estimates that the project will generate cash savings of $6,020,000 per year for eight years. The plant improvements will be depreciated over eight years ($40,000,000/8 years= $5,000,000). Thus, annual effect on income will be $1,020,000($6,020,000-$5,000,000).

Using a discount rate of 11%, calculate the NPV of the modernization project.

NPV $______________