Simythe, Incorporated, manufactures fine furniture. The company is deciding whether

to introduce a new mahogany dining room table set. The set will sell for $$6,200,$

including a set of eight chairs. The company feels that sales will be $1,900,2,050,2,600,$

$2,450,$ and $2,200$ sets per year for the next five years, respectively. Variable costs will

amount to $40$ percent of sales and fixed costs are $$1,810,000$ per yeat. The new tables

will require inventory amounting to $6$ percent of sales, produced and stockpiled in the

year prior to sales. It is believed that the addition of the new table will cause a loss of

$200$ tables per year of the oak tables the company produces. These tables sell for

$$3,500$ and have variable costs of $35$ percent of sales. The inventory for this oak table is

also $6$ percent of sales. The sales of the oak table will continue indefinitely. J$.$ Simythe

currently has excess production capacity. If the company buys the necessary equipment

today. it will cost $$19,000,000.$ However, the excess production capacity means the

company can produce the new table without buying the new equipment. The company

controller has said that the current excess capacity will end in two years with current

production. This means that if the company uses the current excess capacity for the new

table, it will be forced to spend the $$19,000,000$ in two years to accommodate the

increased sales of its current products. In five years, the new equipment will have a

market value of $$3,200,000$ if purchased today, and $$7,900,000$ if purchased in two

years. The equipment is depreciated on a seven$-$year MACRS schedule. The company

has a tax rate of $21$ percent and the required return for the project is $8$ percent. $($MACRS

schedule$)$

Calculate the NPV of new project. $($Do not round intermediate calculations and enter

your answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89$

NPV