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$.,1,234,567\mathrm{.}89.)$

Answer is complete but not