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

manufacturers of fine zithers. The market for zithers is growing quickly. 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 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. Refer to Table $10\mathrm{.}7.$

What is the NPV of the project? $($Do not round intermediate calculations and enter your

answer in dollars, not millions of dollars, rounded to $2$ decimal places, e$.$g$.,$

$1,234,567\mathrm{.}89.)\backslash$table$[[$Property Class$],[$Year$,$Three$-$Year,Five$-$Year,Seven$-$Year$],[1,33\mathrm{.}33\%,20\mathrm{.}00\%,14\mathrm{.}29\%$