Company AA is considering a new three$-$year expansion project that

requires an initial fixed asset investment of $$6$ million. The fixed asset will

be depreciated straight$-$line to zero over its three$-$year tax life, after which

time it will be worthiless. The project is estimated to generate $$3\mathrm{.}4$ million

in annual sales, with costs of $$130,000.$ The tax rate is $20\%.$

Following previous exercise, suppose the project requires an initial

investment in net working capital of $$40,000,$ and the fixed asset will have a

market value of $$200,000$ at the end of the project. What is the project's

year $0$ net cash flow? Year $1?$ Year $2?$ Year $3?$ Suppose the required return

on this project is $12\%,$ what is the project's NPV$?$