Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $210,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? Asset investment Estimated annual sales 8 Costs Net working capital 0 Pretax salvage value SSSSS $ 2,900,000 $ 2,190,000 $ 815,000 $ 300,000 $ 210,000 1 Tax rate 21% 12 Project and asset life 3 13 Required return 12% 14. 15 16 Complete the following analysis. Do not hard code values in your calculations. You must use the huilt-in Excel function to calculate the NPV Sheet1 Complete the following analysis. Do not hard code values in your calculations. You mus use the built-in Excel function to calculate the NPV. 16 17 18 Aftertax salvage value 19 Sell equipment 20 Taxes 21 Aftertax cash flow 22 23 Sales 24 Costs 25 Depreciation 26 EBT 27 Taxes: 28 29 30 31 32 33 Net income Capital spending Net working capital OCF Net cash flow 34 35 NPV 36 Sheet1 H I 15 17 16 Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel function to calculate the NPV. 18 Aftertax salvage value 19 Sell equipment 20 Taxes 21 Aftertax cash flow 22 23 Sales 24 Costs 25 Depreciation 26 EBT 27 Taxes 28 Net income 29 30 Capital spending 31 Net working capital 32 OCF 33 Net cash flow 34 35 NPV 36