Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of 2.29 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $1,790,000 in annual sales with costs of $7000,000. The project requires an initial investment in net working capital of $410,000, and the fixed asset will have a market value of $420,000 at the end of the project.

a. If the tax is 21 percent, what is the projects year 0 net cash flow? year 1? year 2? year 3?

b. If the required return is 12 percent, what is the projects NPV?