Quad Enterprises is considering a new 3 year expansion project that requires an initial fixed asset investment of $2.592 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 $201,600. The project requires an initial investment in net working capital of $288,000. The project is estimated to generate $2,304,000 in annual sales, with costs of $921,600. The tax rate is 23 percent and the required return on the project is 10 percent.

1) What is the projects Year 0 net cash flow?

A. $ -2,880,000 B. $ -3,024,000 C. $ -3,168,000 D. $ -2,736,000 E. $ -2,592,000

2) What is the projects Year 1 net cash flow?

A. $1,263,168 B. $1,326,326 C. $1,389,485 D. $1,200,010 E. $1,136,851

3) What is the projects Year 2 net cash flow?

A. $1,263,168 B. $1,326,326 C. $1,389,485 D. $1,200,010 E. $1,136,851

4) What is the projects Year 3 net cash flow?

A. $1,706,400 B. $1,791,720 C. $1,877,040 D. $1,621,080 E. $1,535,760

5) What is the NPV?

A. $594,319 B. $(605,285) C. $2,136,380 D. $549,312 E. $624,035