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You have been hired as a consultant for Pristine Urban-TechZither, Inc. (PUTZ), manufacturers of fine zithers. The market forzithers is growing quickly. The company bought some land threeyears ago for $1.52 million in anticipation of using it as a toxicwaste dump site but has recently hired another company to handleall toxic materials. Based on a recent appraisal, the companybelieves it could sell the land for $1.62 million on an aftertaxbasis. In four years, the land could be sold for $1.72 millionafter taxes. The company also hired a marketing firm to analyze thezither market, at a cost of $230,000. An excerpt of the marketingreport is as follows: The zither industry will have a rapidexpansion in the next four years. With the brand name recognitionthat PUTZ brings to bear, we feel that the company will be able tosell 4,120, 4,910, 5,620, and 4,420 units each year for the nextfour years, respectively. Again, capitalizing on the namerecognition of PUTZ, we feel that a premium price of $680 can becharged for each zither. Because zithers appear to be a fad, wefeel at the end of the four-year period, sales should bediscontinued. PUTZ believes that fixed costs for the project willbe $455,000 per year, and variable costs are 15 percent of sales.The equipment necessary for production will cost $3.9 million andwill qualify for 100 percent bonus depreciation. At the end of theproject, the equipment can be scrapped for $445,000. Net workingcapital of $150,000 will be required immediately. PUTZ has a 24percent tax rate, and the required return on the project is 13percent. What is the NPV of the project?