Quad Enterprises is considering a new three$-$year expansion project that requires

an initial fixed asset investment of $$2\mathrm{.}9$ million. The fixed asset will be depreciated

straight$-$line to zero over its three$-$year tax life, after which time it will be worthless.

The project is estimated to generate $$2,190,000$ in annual sales, with costs of

$$815,000.$ The tax rate is $21$ percent. If the required return is $12$ percent, what is the

project's depreciation?

Asset investment

Estimated annual sales

Costs

Tax rate

Project and asset life

Required return

$

$

$2,900,000$

$2,190,000$

$815,000$

$21\%$

$12\%$

DepreciationQuad Enterprises is considering a new three$-$year expansion project that requires

an initial fixed asset investment of $$2\mathrm{.}9$ million. The fixed asset will be depreciated

straight$-$line to zero over its three$-$year tax life, after which time it will be worthless.

The project is estimated to generate $$2,190,000$ in annual sales, with costs of

$$815,000.$ The tax rate is $21$ percent. If the required return is $12$ percent, what is the

project's NPV$?$

Asset investment

Estimated annual sales

Costs

Tax rate

Project and asset life

Required return

$

$

$2,900,000$

$2,190,000$

$815,000$

$21\%$

$12\%$

Complete the following analysis. Do not hard code values in your calculations.

Sales

Costs

Depreciation

EBT

Taxes

$

$2,190,000$

$815,000$