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$$s rental charge on the warehouse is $$195,000,$ 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 $$1\mathrm{.}77$ million. This could be depreciated for tax purposes straight$-$line over $10$ years. However, Pigpen expects to terminate the project at the end of $8$ years and to resell the plant and equipment in year $8$ for $$590,000.$ Finally, the project requires an immediate investment in working capital of $$445,000.$ Thereafter, working capital is forecasted to be $10\%$ of sales in each of years $1$ through $7.$ Year $1$ sales of hog feed are expected to be $$6\mathrm{.}10$ 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 $12\%.$