(Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $\$ 9,500,000$ on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to $\$ 2,000,000$ per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at $\$ 1.1$ million. Thus, in year 6 the investment cash inflow totals $\$ 3,100,000$. Calculate the project's NPV using a discount rate of 8 percent. If the discount rate is 8 percent, then the project's NPV is $\$ \square$. (Round to the nearest dollar.)

Step 1 ：Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of \$9,500,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to \$2,000,000 per year for each of the next 6 years. In year 6 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at \$1.1 million. Thus, in year 6 the investment cash inflow totals \$3,100,000. We are asked to calculate the project's NPV using a discount rate of 8 percent.

Step 2 ：The Net Present Value (NPV) is a measure of the profitability of an investment. It is calculated by subtracting the initial investment from the present value of future cash inflows, discounted at a certain rate. In this case, the initial investment is \$9,500,000. The annual net cash inflow is \$2,000,000 for 6 years, and in the 6th year, there is an additional cash inflow of \$1,100,000. The discount rate is 8 percent.

Step 3 ：The formula for NPV is: \[NPV = \sum \left[ \frac{(Cash\ inflow\ at\ time\ t)}{(1 + r)^t} \right] - Initial\ Investment\] where: t is the time period, r is the discount rate.

Step 4 ：Substituting the given values into the formula, we get: \[NPV = \sum \left[ \frac{(2000000)}{(1 + 0.08)^t} \right] + \frac{(3100000)}{(1 + 0.08)^6} - 9500000\]

Step 5 ：Solving the above expression, we find that the project's NPV using a discount rate of 8 percent is \(\boxed{438946}\).