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Your company is considering an expansion into a new product area. The company has collected the following information about the proposed product. - The project

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Your company is considering an expansion into a new product area. The company has collected the following information about the proposed product. - The project has an anticipated economic life of 5 years. - The company will have to purchase a new machine to produce the product. The machine has an up-front cost (Year 0) of $3,000,000. - The machine will be depreciated on a 3-year MACRS-life basis (depreciation will be taken in Years 14 and depreciation rates are: Year 1=33% : Year 2=45% : Year 3=15%; and Year 4= 7%) - The company anticipates that the machine will last for at least five years, and that after five years, the machine will be sold for $400,000 (pre-tax). - If the company goes ahead with the project, it will have an effect on the company's net operating working capital. At the outset, Year 0 , current assets will increase by $450,000, while accounts payable will increase by $200,000 and accruals will increase by $150,000. At Year 5 , the net operating working capital will be recovered after the project is completed. - The project is expected to produce revenues of $2,200,000 the first year, $2,500,000 the second and third years, $2,000,000 the fourth year, and $1,600,000 the final year. - Operating costs (excluding depreciation) are expected to be equal to 50 percent of sales revenue. - The company's interest expense each year will be $120,000. - Because of synergies, the new project is expected to increase the after-tax cash flows of the company's existing products by $40,000 a year (Years 1-5) and this is considered to be incremental to this particular project. - The company's overall WACC is 5 percent. However, the proposed project is more risky than the average project, leading the firm to use a WACC of 8 percent for this project. - The company's tax rate is 40 percent. Determine the NPV for this project. Enter your answer in dollars, rounded to the nearest dollar, with no punctuation. For example, if your answer is " $122,836.01 ", enter " 122836

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