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Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,340,000. The fixed asset falls into the three-year
Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,340,000. The fixed asset falls into the three-year MACRS class (MACRS schedule). The project is estimated to generate $1,740,000 in annual sales, with costs of $644,000. The project requires an initial investment in net working capital of $310,000, and the fixed asset will have a market value of $270,000 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 10 percent, what is the project's NPV
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