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Please show all formulas for excel calculations Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9
Please show all formulas for excel calculations
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 on a three-year MACRS schedule. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $210,000 at the end of the project. What is the project's Year O net cash flow? Year 1? Year 2? Year 3? The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? Asset investment $ Estimated annual sales $ Costs $ Net working capital Pretax salvage value $ Tax rate Project and asset life Required return MACRS percentages Year 1 Year 2 Year 3 2,900,000 2,190,000 815,000 300,000 210,000 21% 3 12% 0.3333 0.4445 0.1481 Sales Costs Depreciation EBT Taxes Net income Fixed asset book value in three years Aftertax salvage value Sell equipment Taxes Aftertax cash flow Capital spending Net working capital OCF Net cash flow NPVStep by Step Solution
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