You have been hired as a consultant for Pristine Urban$-$Tech Zither, Inc. $($PUTZ$),$ manufact

The company bought some land three years ago for $$1\mathrm{.}9$ million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could 'sell the land for $$2\mathrm{.}2$ million on an aftertax basis. In four years, the land could be sold for $$2\mathrm{.}4$ million after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $$275,000.$ An excerpt of the marketing report is as follows:

The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the

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company will be able to sell $5,200,5,900,6,500,$ and $4,800$ units each year for the next four years, respectively. Again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $$435$ can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the four$-$year period, sales should be discontinued.

PUTZ believes that fixed costs for the project will be $$375,000$ per year, and variable costs are $20$ percent of sales. The equipment necessary for production will cost $$2\mathrm{.}85$ million and will be depreciated according to a three$-$year MACRS schedule. At the end of the project, the equipment can be scrapped for $$405,000.$ Net working capital of $$150,000$ will be required immediately. PUTZ has a tax rate of $22$ percent, and the required return on the project is $13$ percent. What is the NPV of the project?

Input area:

Need fixed assests $,$ land, marketing study, net working capital, total cash flow