Sony International has an investment opportunity to produce a new stereo HDTV. The required investment on January 1 of this year is $95 million. The firm will depreciate the investment to zero using the straight-line method over four years. The investment has no resale value after completion of the project. The tax rate is 21 percent. The price of the product will be $515 per unit, in real terms, and will not change over the life of the project. Labor costs for Year 1 will be $20.43 per hour in real terms, and will increase at 2 percent per year in real terms. Energy costs for Year 1 will be $6.25 per physical unit, in real terms, and will increase at 3 percent per year in real terms. The inflation rate is 4 percent per year. Revenues are received and costs are paid at year-end. Refer to the table below for the production schedule.

The real discount rate for the project is 8 percent. Calculate the NPV of this project.

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Year 1 Year 2 Year 3 Year 4 Physical production, in units 160,000 185,000 245,000 140,000 Labor input, in hours 2,150,000 2,470,000 2,950,000 1,950,000 Energy input, in physical units 180,000 215,000 280,000 167,500