United Pigpen (UP) 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 (i.e. an opportunity cost). The next years rental charge on the warehouse is $260,000, 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 $3.120 million. This could be depreciated for tax purposes over 10 years (use straight-line depreciation). However, UP expects to terminate the project at the end of eight years and to resell the plant and equipment on the last day of year 8 for $1,040,000. Finally, the project requires an initial investment (time 0) in working capital of $910,000. Thereafter, working capital is forecasted to be 10% of sales in each of years 1 through 7 (working capital is zero at time 8). Year 1 sales of hog feed are expected to be $10.920 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 25%. Sales and costs will continue through time 8. The cost of capital is 12%. What is the NPV of UPs project?