What is the value of the project given the following information?Comet Camping is considering the introduction of a new line of sleeping bags. The project requires an initial investment of $800,000 in fixed assets, which they believe can be sold for $525,000 at the end of the project. The project would use a parcel of land Comet purchased two years ago for $100,000 which now has a market value of $200,000. Assume there are no further cash flows associated with the land. Comet spent $50,000 on a feasibility study in order to generate the following pro forma financial statements.

Year 1 2 3 4

Sales 360,000 600,000 720,000 715,000

Variable Costs 180,000 300,000 360,000 390,000

Fixed Costs 25,000 25,000 25,000 25,000

Depreciation 114,320 195,920 139,920 99,920

EBIT 40,680 79,080 195,080 200,080

Taxes 8,543 16,607 40,967 42,017

Net Income 32,137 62,473 154,113 158,063

Year 0 1 2 3 4

Net Working Capital 25,000 25,000 25,000 25,000 25,00

Net Fixed Assets 800,000 685,680 489,760 349,840 249,920

If undertaken, the project is expected to have similar risks as existing operations and will be financed with the same mix of debt and equity. Comet has 2 million shares outstanding priced at $12 per share. Comet also has 10,000 bonds outstanding with a face value of $1,000 each. These bonds have a coupon rate of 11%, make payments on a semi-annual basis, and have 26 years to maturity. The current market price is $1,250 per Comet bond. Treasury bills currently yield 4% per annum. The S&P 500 has an expected return of 11% and a variance of returns of 2.25. Comet stock has a beta of 1.20 and a standard deviation of returns of 1.75. The marginal tax rate is 21% and the Consumer Price Index is expected to continue growing at 2% per annum for the foreseeable future.