Problem $6-17$ Project NPV

United Pigpen $($UP$)$ is considering a proposal to manufacture high protein hog feed. The project would make use of an existing warehouse, which is currently rented out to a neighboring firm. The next year's rental charge on the warehouse is $\backslash (\backslash$$ $200,000\backslash ),$ and thereafter the rent is expected to grow in line with inflation at $\backslash (4\backslash \%\backslash )$ a year. In addition to using the warehouse, the proposal envisages an investment in plant and equipment of $\backslash (\backslash$$ $2\mathrm{.}40\backslash )$ million. This could be depreciated for tax purposes over $10$ years. However, UP expects to terminate the project at the end of eight years and to resell the plant and equipment in year $8$ for $\backslash (\backslash$$ $800,000\backslash ).$ Finally, the project requires an initial investment in working capital of $\backslash (\backslash$$ $700,000\backslash ).$ Thereafter, working capital is forecasted to be $\backslash (10\backslash \%\backslash )$ of sales in each of years $1$ through $7.$ Year $1$ sales of hog feed are expected to be $\backslash (\backslash$$ $8\mathrm{.}40\backslash )$ million, and thereafter sales are forecasted to grow by $\backslash (5\backslash \%\backslash )$ a year, slightly faster than the inflation rate. Manufacturing costs are expected to be $\backslash (90\backslash \%\backslash )$ of sales, and profits are subject to tax at $\backslash (25\backslash \%\backslash ).$ The cost of capital is $\backslash (12\backslash \%\backslash ).$ What is the NPV of UP's project?

Note: Do not round your intermediate calculations. Enter your answer in thousands rounded to $1$ decimal place.

NPV