Problem $6-5$ NPV and Modified ACRS

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

InItial fixed asset Investment of $$2\mathrm{.}28$ million. The fixed asset falls into the $3-$year MACRS

class. $($MACRS schedule$)$ The project is estimated to generate $$1,750,000$ in annual

sales, with costs of $$652,000.$ The project requires an Initial Investment in net working

capital of $$330,000,$ and the fixed asset will have a market value of $$300,000$ at the end

of the project.

a$.$ If the tax rate is $23$ percent, what is the project's Year $0$ net cash flow? Year $1?$ Year $2?$

Year $3?($A negatlve answer should be Indicated by a minus sign. Do not round

Intermedlate 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 $12$ percent, what is the project's NPV$?($Do not round

Intermedlate calculations and enter your answer In dollars, not millions of dollars,

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