Homework $7($i$)$

Esfandairi Enterprises is considering a new three$-$year expansion project that requires an $-$ initial fixed asset investment of $$2\mathrm{.}31$ million. The fixed asset will be depreciated straightline to zero over its three$-$year tax life. The project is estimated to generate $$1,725,000$ in annual sales, with costs of $$635,000.$ The project requires an initial investment in net working capital of $$280,000,$ and the fixed asset will have a market value of $$225,000$ at the end of the project.

a$.$ If the tax rate is $23$ 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 $11$ percent, what is the project's NPV$?($Do not round intermediate calculations and round your answer to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

$\backslash$table$[[$a$.$ Year $0$ cash flow,$],[$a$.$ Year $1$ cash flow,$],[$a$.$ Year $2$ cash flow,$],[$a$.$ Year $3$ cash flow,$],[$b$.$ NPV$,]]$

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