The Haugen Yacht Company (HYC), a prominent sailboat builder in Florida, may design a new 30-foot sailboat based on the "winged" keels first introduced on the 12 meter yachts that raced for the America's Cup. First, HYC would have to invest $10,000 at t=0 for the design and model tank testing of the new boat. HYC's managers believe that there is a 60 percent probability that this phase will be successful and the project will contiue. If Stage 1 is not successful, the project toll be abandoned with zero salvage value. The next stage, if undertaken, would consist of making the molds and producing two prototype boats. This would cost $500,000 at t=l. If the boats test well, HYC would go into production. If they do not, the molds and ptototypes could be sold for $100,000. The managers estimate that the probability is 80 percent that the boats will pass testing, and that Stage 3 will be undertaken. Stage 3 consists of converting an unused production line to produce the new design. This would cost $1,000,000 at t=2. If the economy is strong at this point, the net value of sales would be $3,000,000, while if the economy is weak, the net value would be $ 1, 500,000. Both net values occur at t=3, and each state of the economy has a probability of 0.5HYC's WACC is 12 percent. Assuming that this project is of average risk, what is the project's expected NPV