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10-13 NPV and Bonus Depreciation [LO1] Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.31 million.
10-13 NPV and Bonus Depreciation [LO1] Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.31 million. The fixed asset qualifies for 100 percent bonus depreciation in the first year. The project is estimated to generate $1,785,000 in annual sales, with costs of $680,000. The project requires an initial investment in net working capital of $400,000, and the fixed asset will have a market value of $405,000 at the end of the project. a. If the tax rate is 25 percent, what is the projects Year 0 net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do
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