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A B D E F G H I J 3 Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? 4 5 6 7 A A A $ 8 Asset investment Estimated annual sales Costs Tax rate Project and asset life Required return 2,900,000 2,190,000 815,000 21% 3 12% 9 10 11 12 13 B D E F. G H I J 13 14 Complete the following analysis. Do not hard code values in your calculations. 15 16 $ 17 18 Sales Costs Depreciation EBT Taxes Net income 2,190,000 815,000 966,667 408,333 85,750 322,583 19 $ 20 21 $ 22 23 OCF $ 1,289,250 24 25 NPV 26 27