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We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows: Year Unit Sales 1 94,500 2 106,500 3 129,500

We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows:

Year Unit Sales
1 94,500
2 106,500
3 129,500
4 135,500
5 88,500

The new system will be priced to sell at $410 each.

The cockroach eradicator project will require $1,700,000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $280, and total fixed costs are $1,200,000 per year. The equipment necessary to begin production will cost a total of $16 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost.

The relevant tax rate is 35%, and the required return is 16%. Based on these preliminary estimates, what is the NPV of the project

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