Quick Computing Co. is going to invest in a new production line. The project will generate revenues of $20m per year for the next 4 years (year 1-4). They spent $0.2m to do a feasibility study to assess its potential.

Cost:

Upfront operating expense (year 0) = $8m;

Cost of new equipment = $10 (lasts for 5 year life);

Depreciation (year 1-5) = $2m per year;

Cost of Goods Sold (year 1-4) = $11m per year;

SG&A (year 1-4) = $1.5m; Tax rate = 30%

Additional info:

• The new production line will be placed in a warehouse space that the company would have otherwise rented for $0.3m per year during the four years.
• The new production line will reduce the operating of another existing production line (OLD model) for the five years. COGS of OLD model will be reduced by $1m per year. Revenue of OLD model will be reduced by $1.5 per year.

What is the incremental net operating profit after tax (NOPAT) for year zero from this new production line?