You have been hired as a financial consultant to Defense Electronics, Inc. (DEI), a large, publicly traded firm that is the market share leader in radar detection systems (RDSs). The company is looking at setting up a manufacturing plant overseas to produce a new line of RDSs. This will be a five-year project. The company bought a land three years ago for $3.9 million. The land was appraised last week for $4.1 million on an after tax basis. In five years, its aftertax value will be $4.4 million, but the company expects to keep the land for another future project. The company wants to build its new manufacturing plant on this land; the plant and equipment will cost $37 million to build. The following market data on DEIs securities are as follows: Debt: 205,000 bonds with a coupon rate of 5.8% outstanding, 25 years to maturity, selling for 106% of par; the bonds have a $1,000 par value each and make semiannual payments. It implies that its YTM is 5.36% 25Common stock: 8,600,000 shares outstanding, selling for $67 per share; the beta is 1.15. Market: 7 percent expected market risk premium; 3.1 percent risk-free rate. DEI uses G.M. Wharton as its lead underwriter. Wharton charges DEI spreads of 7% on new common stock issues, and 3% on new debt issues. Wharton has recommended to DEI that it raise the funds needed to build the plant by issuing new shares of common stock. DEIs tax rate is 25%. The project requires $1.5 million in initial net working capital investment to get operational. Assume DEI raises all equity for new projects externally. The new RDS project is something riskier than a typical project for DEI, primarily because the plant is being located overseas. Management has told you to use an adjustment factor of +5% to account for this increased riskiness. The manufacturing plant has an eight-year tax life, and DEI uses straight-line depreciation to a zero salvage value. At the end of the project, the plant and equipment can be scrapped for $4.9 million. The company will incur $6.9 million in annual fixed costs. The plan is to manufacture 8,500 RDSs per year and sell them at $13,450 per machine; the variable production costs are $10,600 per RDS. What is the RDS project's NPV