Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life. The project is estimated to generate $1,735,000 in annual sales, with costs of $645,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $255,000 at the end of the project. a. If the tax rate is 25 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, e.g., 1,234,567.) b. If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) X Answer is not complete. a. Year 0 cash flow a. Year 1 cash flow a. Year 2 cash flow a. Year 3 cash flow b. NPV S $ $ $ -2,330,000 1,011,666 1,011,666 1,011,666 X

Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.33 million. The fixed asset will be depreciated straightline to zero over its three-year tax life. The project is estimated to generate $1,735,000 in annual sales, with costs of $645,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $255,000 at the end of the project. a. If the tax rate is 25 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, e.g., 1,234,567.) b. If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)