P10-11 Calculating Project Cash Flow from Assets [LO1]

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.48 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $504,000. The project requires an initial investment in net working capital of $720,000. The project is estimated to generate $5,760,000 in annual sales, with costs of $2,304,000. The tax rate is 32 percent and the required return on the project is 16 percent.

What is the project's year 0 cash flow? Year 1 cash flow? Year 2 cash flow? Year 3 cash flow? NPV?