We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows:

Year. Unit Sales

1 95,500

2. 107,500

3. 130,500

4. 136,500

5. 89,500

The new system will be priced to sell at $420 each.

The cockroach eradicator project will require $1,900,000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $290, and total fixed costs are $1,400,000 per year. The equipment necessary to begin production will cost a total of $17 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost.

The relevant tax rate is 35%, and the required return is 18%. Based on these preliminary estimates, what is the NPV of the project?