Spectre Company has recently identified an island off the northwestern coast of Africa that has some of the richest fertilized land in the world. Spectre wants to plant orange and grapefruit trees. The harvested fruit will be sold only in the United States and these citrus trees have a life span of just five years. The owners of the island have offered to sell it to Spectre for $2 million. Spectre would also be faced with additional initial costs of $14 million to engineer the equipment that will be used in planting, fertilizing, and harvesting. Spectre is an environmentally aware firm and has agreed to plant flowers and butterfly bushes before selling the island at the end of the five-year period.

Spectre will plant trees that will produce no fruit until they mature at the end of year three. Therefore, there are no revenues expected in years one and two. The harvest begins in year 3 and continues until the end of year seven. The following information has been made available to Spectre:

Year	One and Two		Three, Four, and Five
Revenues	$2 million		$11.2 million
Operating Expenses (excluding depreciation)	$1 million		$2.2 million
Depreciation Expense	$1 million		$4 million
Interest Expense	$1 million		$0.75 million

Spectre will use the New York Bond market to issue $10.25 million in five-year bonds. The coupon rate is 6.22% and the current price should be $976.

Spectre common shares pay a current dividend of $1.83 with an expected growth rate of 3.8%. Current stock price is $17.93.

The following is a list of other relevant information: Spectre pays a marginal corporate tax rate of 20%; remember that land cannot be depreciated. Spectre hopes to sell the land for $2 million at the end of year 7 after spending $1 million on flower and bush planting and making a 4 million donation to the European Citrus Fund as part of its philanthropic efforts. The relevant exchange rate is $1.44/.

Determine the net present value (in terms of US dollars) for this project.

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