United Pigpen is considering a proposal to manufacture high$-$protein hog feed. The project would make use of an

existing warehouse, which is currently rented out to a neighboring firm. The next year's rental charge on the warehouse

is $$200,000,$ and thereafter, the rent is expected to grow in line with inflation at $4\%$ a year. In addition to using the

warehouse, the proposal envisages an investment in plant and equipment of $$1\mathrm{.}80$ million. This could be depreciated for

tax purposes straight$-$line over $10$ years. However, Pigpen expects to terminate the project at the end of $8$ years and to

resell the plant and equipment in year $8$ for $$600,000.$ Finally, the project requires an immediate investment in working

capital of $$450,000.$ Thereafter, working capital is forecasted to be $10\%$ of sales in each of years $1$ through $7.$ Year $1$ sales

of hog feed are expected to be $$6\mathrm{.}20$ million, and thereafter, sales are forecasted to grow by $5\%$ a year, slightly faster

than the inflation rate. Manufacturing costs are expected to be $90\%$ of sales, and profits are subject to tax at $35\%.$ The

cost of capital is $12\%.$

What is the NPV of Pigpen's project?

Note: Enter your answer in thousands, not in millions, rounded to the nearest dollar.

NPV

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