Maple Media is considering a proposal to enter a new line of business. In reviewing the proposal, the companys CFO is considering the following facts:

The new business will require the company to purchase additional fixed assets that will cost $600,000. These costs will be depreciated on a straight line basis over three years.

At the end of three years, the company will get out of the business and will sell the fixed assets at a salvage value of $100,000.

The project will require a $50,000 increase in net operating working capital, which will be recovered at the projects conclusion.

The companys marginal tax rate is 30%.

The new business is expected to generate $2 million in sales each year. The operating costs excluding depreciation are expected to be $1.4 million per year. The projects cost of capital is 12%.

What is the projects net present value (NPV)? Should the project be undertaken? (Please show your calculations part by part.)