Cows-R-Us is considering a proposal to manufacture a new cow feed. The project would require an investment in $1.2 million worth of equipment. Itwould be depreciated straight-line over 10 years. The company prefers to look atprojects over not longer than 8 years, so they assume that there'd be a residualvalue of $400,000 at the end of year 8. The project would require $350,000 of additional working capital. Thereafter,working capital would be expected to be 10% of sales. Year 1 sales are expected to be $4.2 million and grow by 5% per year. Cost of goodssold is 90% of sales and the tax rate is 35%. The cost of capital is 12%This project would make use of an existing facility, which is currently rented out to aneighboring firm. Next year's rental of that facility is $100,000 and thereafter therental would be expected to grow at 4%. What is the project's NPV? Note, the tax on the sale at year 8 should reflect the following: the original cost lessall depreciation gives a new basis. That basis is subtracted from the sales price.