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Please show work/explanation! Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset nvestment of $2.9 million. The fixed asset
Please show work/explanation!
Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset nvestment of $2.9 million. The fixed asset will be depreciated on a three-year MACRS schedule. The oroject is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The project equires 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 0 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? Complete the following analysis. Do not hard code values in your calculations. You must useStep by Step Solution
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