You have been hired as a consultant for Urban-Tech Zither, Inc., manufacturers of fine zithers. The market for Zither is growing quickly. The company bought some land three years ago for $1.4 million in anticipating 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 $1.5 million on an after-tax basis. In four years, the land could be sold for $1.6 million after taxes. The company also hired a marketing firm to analyze the Zither market, at a cost of $125,000. The marketing firm predicts that the company will be able to sell 3,800, 4,700, 5,300, and 4,200 units of zither each year for next four years, respectively. The price of $650 can be charged for each zither. At the end of four-year period, sales should be discontinued. The company believes that fixed costs for the project will be $425,000 per year, and variable costs are 15% of sales. The equipment necessary for production will cost $3.5 million and will be depreciated according to a three-year MACRS schedule. At the end of the project, the equipment can be scrapped for $400,000. Net working capital of $125,000 will be required immediately. The company has a 38% tax rate, and the required return on the project is 13%. What is the NPV of the project?

MACRS schedule

Year	Three-Year Property Class
1	33.33%
2	44.45%
3	14.81%
4	7.41%