Problem $6-26$ Project Analysis and Inflation

Shinoda Manufacturing, Incorporated, has been considering the purchase of a new manufacturing facility for $$640,000.$ The facility is to be fully depreciated on a straight$-$line basis over seven years. It is expected to have no resale value at that time. Operating revenues from the facility are expected to be $$460,000,$ in nominal terms, at the end of the first year. The revenues are expected to increase at the inflation rate of $2$ percent. Production costs at the end of the first year will be $$305,000,$ in nominal terms, and they are expected to increase at $3$ percent per year. The real discount rate is $5$ percent. The corporate tax rate is $25$ percent. Calculate the NPV of the project. $($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$