A new 3-year expansion project that requires an initial fixed asset investment of $2.29 million. The fixed asset falls into the 3-year MACRS class (MACRS schedule). The project is estimated to generate $1,790,000 in annual sales, with costs of $684,000. The project requires an initial investment in net working capital of $410,000, and the fixed asset will have a market value of $420,000 at the end of the project.

If the tax rate is 21 percent, what is the projects Year 0 net cash flow? Year 1? Year 2? Year 3?

If the required return is 12 percent, what is the project's NPV?