Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.404 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 $109,200. The project requires an initial investment in net working capital of $156,000. The project is estimated to generate $1,248,000 in annual sales, with costs of $499,200. The tax rate is 25 percent and the required return on the project is 15 percent.