McCormick & Company is considering a project that requiresan initial investment of $24 million to build a new plant andpurchase equipment. The investment will be depreciated as amodified accelerated cost recovery system (MACRS) seven-year classasset. The new plant will be built on some of the company's land,which has a current, after-tax market value of $4.3 million.

The company will produce bulk units at a cost of $130 each andwill sell them for $420 each. There are annual fixed costs of$500,000. Unit sales are expected to be $150,000 each year for thenext six years, at which time the project will be abandoned. Atthat time, the plant and equipment is expected to be worth $8million (before tax) and the land is expected to be worth $5.4million (after tax).

To supplement the production process, the company will need topurchase $1 million worth of inventory. That inventory will bedepleted during the final year of the project. The company has $100million of debt outstanding with a yield to maturity of 8 percent,and has $150 million of equity outstanding with a beta of 0.9. Theexpected market return is 13 percent, and the risk-free rate is 5percent. The company's marginal tax rate is 40 percent.

Find the NPV using the after-tax WACC as the discountrate.