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Esfandairi Enterprises is considering a new three - year expansion project that requires an initial fixed asset investment of $ 2 . 2 7 million.

Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.27 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,800,000 in annual sales, with costs of $710,000. The tax rate is 23 percent and the required return on the project is 11 percent. What is the projects NPV?

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