2 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. The project is estimated to generate $1.645 million in annual sales, with costs of $610,000. The tax rate is 21 percent and the required return is 12 percent. Suppose the project requires an initial investment in net working capital of $250,000, and the fixed asset will have a market value of $180,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? What is the NPV? 3 4 Input area: 5 6 Asset investment $2,180,000 7 Estimated annual sales $1,645,000 8 Costs $610,000 9 Tax rate 21% 10 Required return 12% 11 Project and asset live 3 12 Initial investment in NWC $250,000 $180,000 13 Fixed asset value at end 14 15 (Use cells A6 to B13 from the given information to complete this question. You must use the built-in 16 Excel function to answer this question. Taxes on the salvage value should be negative for a tax 17 liability and positive for a tax credit.) 18 19 Output area: 20 21 Aftertax salvage value 22 Sell equipment 23 Taxes