Esfandairi Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset falls into the 3-year MACRS class. (MACRS schedule) The project is estimated to generate $1,755,000 in annual sales, with costs of $656,000. The project requires an initial investment in net working capital of $340,000, and the fixed asset will have a market value of $315,000 at the end of the project. a. If the tax rate is 24 percent, what is the project's Year O net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) b. If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) es Esfandairi Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset falls into the 3-year MACRS class. (MACRS schedule) The project is estimated to generate $1,755,000 in annual sales, with costs of $656,000. The project requires an initial investment in net working capital of $340,000, and the fixed asset will have a market value of $315,000 at the end of the project. a. If the tax rate is 24 percent, what is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) b. If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) a. Year 0 cash flow a. Year 1 cash flow a. Year 2 cash flow a. Year 3 cash flow b. NPV Table 6.3 Depreciation under Modified Accelerated Cost Recovery System (MACRS) Recovery Period Class Year 3 Years 5 Years 7 Years 10 Years 15 Years 20 Years 1 3333 2000 .1429 1000 .0500 03750 2 .4445 .3200 .2449 1800 .0950 .07219 3 .1481 1920 1749 1440 .0855 .06677 4 .0741 .1152 .1249 1152 .0770 .06177 5 .1152 0893 .0922 .0693 .05713 6 0576 0892 0737 0623 05285 7 0893 0655 0590 04888 8 0446 0655 .0590 .04522 9 0656 .0591 04462 10 0655 0590 .04461 11 0328 0591 .04462 12 0590 04461 13 0591 .04462 14 0590 .04461 15 0591 .04462 16 .0295 .04461 17 .04462 18 .04461 19 .04462 20 .04461 21 .02231