Quad Enterprises is considering a new threeyear expansion project that requires an fixed asset investment of $2.37 million. The fixed asset will be depreciated straight line to zero over its three year tax . The project is estimated to generate $1,765,000 annual sales with costs of $675,000 . 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 . At 21% tax rate find net cash flow for year 0,1,2, and 3. If the required return is 11% what is the projects NPV?

Problem 10-11 Calculating Project Cash Flow from Assets (L01] Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life. The project is estimated to generate $1,765,000 in annual sales, with costs of $675,000. 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 O net cash flow? Year 1? Year 2? Year 3? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, e.g., 1,234,567. A negative answer should be indicated by a minus sign.) b. If the required return is 11 percent, what is the project's NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Year 0 cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow NPV -2,370,000 916,964 818,718 730,998 96,680.71 $