Problem $6-5$ NPV and Modified ACRS

Esfandairi Enterprises is considering a new $3-$year expansion project that requires an

initial fixed asset investment of $$2\mathrm{.}37$ million. The fixed asset falls into the $3-$year MACRS

class. $($MACRS schedule$)$ The project is estimated to generate $$1,765,000$ in annual

sales, with costs of $$664,000.$ The project requires an initial investment in net working

capital of $$360,000,$ and the fixed asset will have a market value of $$345,000$ at the end

of the project.

a$.$ If the tax rate is $21$ 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,

rounded to two decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$

b$.$ If the required return is $11$ percent, what is the project's NPV$?($Do not round

intermediate calculations and enter your answer in dollars, not millions of dollars,

rounded to two decimal places, e$.$g$.,1,234,567\mathrm{.}89.)$

Answer is complete but not entirely correct.