Your company has been doing$$ well, reaching $$$$1\mathrm{.}02$ million in$$ earnings, and is considering launching a new product. Designing the new product has already cost $$$$546000.$ The company estimates that it will sell $783000$ units per year for $ $2\mathrm{.}96$ per unit and variable$$ non$-$labor costs will be $$$$1\mathrm{.}01$ per unit. Production will end after year $3.$ New equipment costing $ $1\mathrm{.}17$ million will be required. The equipment will be depreciated to zero using the$7-$year MACRS schedule. You plan to sell the equipment for book value at the end of year $3.$ Your current level of working capital is $$$$309000.$ The new product will require the working capital to increase to a level of $$$$385000$immediately$,$ then to $$$$399$ comma $000$ in year$1,$ in year $2$ the level will be $$$$347$ comma $000,$ and finally in year $3$ the level will return to $$$$309000.$ Your tax rate is $25\%.$ The discount rate for this project is $9\mathrm{.}5\%.$ Do the capital budgeting analysis for this project and calculate its NPV$.$

Note$$: Assume that the equipment is put into use in year $1.$

Your company has been doing well, reaching $$1\mathrm{.}02$ million in earnings, and is considering launching a new

product. Designing the new product has already cost $$546,000.$ The company estimates that it will sell

$783,000$ units per year for $$2\mathrm{.}96$ per unit and variable non$-$labor costs will be $$1\mathrm{.}01$ per unit. Production will

end after year $3.$ New equipment costing $$1\mathrm{.}17$ million will be required. The equipment will be depreciated to

zero using the $7-$year MACRS schedule. You plan to sell the equipment for book value at the end of year $3.$

Your current level of working capital is $$309,000.$ The new product will require the working capital to increase

to a level of $$385,000$ immediately, then to $$399,000$ in year $1,$ in year $2$ the level will be $$347,000,$ and

finally in year $3$ the level will return to $$309,000.$ Your tax rate is $25\%.$ The discount rate for this project is

$9\mathrm{.}5\%.$ Do the capital budgeting analysis for this project and calculate its NPV$.$

Note: Assume that the equipment is put into use in year $1.$

Depreciation in year $2$ will be $$286533.($Round to the nearest dollar.$)$

Depreciation in year $3$ will be $$204633.($Round to the nearest dollar.$)$

Complete the capital budgeting analysis for this project below: $($Round to the nearest dollar.$)$