Esfandiari Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset qualifies for 100 percent bonus depreciation. The project is estimated to generate $2,180,000 in annual sales, with costs of $855,000. The project requires an initial investment in net working capital of $400,000 and the fixed asset will have a market value of $260,000 at the end of the project.

If the tax rate is 25 percent, what is the projects Year 1 net cash flow? Year 2? Year 3?

Note: 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 the nearest whole number, e.g., 1,234,567.

If the required return is 9 percent, what is the project's NPV?

Note: Enter your answer in dollars, not millions of dollars. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 1,234,567.89.

\begin{tabular}{|l|l|} \hline a. Year 0 cash flow & \\ \hline Year 1 cash flow \\ \hline Year 2 cash flow & \\ \hline Year 3 cash flow & \\ \hline b. NPV & \\ \hline \end{tabular}