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1 0 . Esfandairi Enterprises is considering a new three - year expansion project that requires an initial fixed asset investment of $ 2 .

10. Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1.645 million in annual sales, with costs of $610,000. Suppose the required return on the project is 12 percent. What is the project's NPV?

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