Example Summer Tyme, Inc. is considering a three-year expansion project that requires an initial fixed investment of $3.4 million. The fixed asset falls into the three-year MACRS category and will have a market value of $264,600 after three years. The project requires an initial investment in net working capital of $378,000 The project is estimated to generate $3,024,000 in annual sales, with costs of $1,209,600. The tax rate is 32% and the required return on the project is 16%