Esfandairi Enterprises is considering a new three-year expansion project that rer

initial fixed asset investment of $2.41 million. The fixed asset will be depreciated

line to zero over its three-year tax life. The project is estimated to generate $1,775,000 annual sales, with costs of $685,000. The project requires an initial investment in net

working capital of $380,000, and the fixed asset will have a market value of $375,000 at the end of the project.

a. If the tax rate is 23 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