Consider the same project described in the previous problem, where the equipment will cost $18,000,000. It will depreciated by the straight-line method over six years, and the useful life of the project is also estimated to be six years. You expect annual sales to be $12,750,000. Fixed Costs are estimated at $1,750,000 and variable costs should be 55% of sales. Your firm faces a 30% marginal tax rate.

You also expect that at the end of the six-year operating life, you will be able to sell the equipment for scrap for $5,000,000. Consider any capital gains taxes on this sell.

If your firms required a return of 9% on such projects, estimate the Net Present Value of this investment.

Group of answer choices

-$646,362

$592,278

$1,539,984

$645,583