You are a manager at Northern Fibre, which is considering expanding its operations in synthetic fibre manufacturing. Your boss comes into your office, drops aconsultant's report on your desk, and complains, "We owe these consultants

$1.8 million for this report, and I am not sure their analysis makes sense. Before we spend the $21 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions ofdollars):

	1	2	. . .	9	10
Sales revenue	32.000	32.000		32.000	32.000
Cost of goods sold	19.200	19.200		19.200	19.200
=Gross profit	12.800	12.800		12.800	12.800
General, sales, and administrative expenses	1.680	1.680		1.680	1.680
Depreciation	2.100	2.100		2.100	2.100
=Net operating income	9.0200	9.0200		9.0200	9.0200
Income tax	3.157	3.157		3.157	3.157
=Net income	5.863	5.863		5.863	5.863

If the cost of capital for this project is 11%,

what is your estimate of the value of the new project?_________