Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.28 million. The fixed asset falls t into the three-year MACRS class . the project is estimated to generate $1,750,000 in annual sales with half of $652,000. the project requires an initial investment in the operating capital of $330,000 in the fixed asset will have a market value of $300,000 at the end of the project.

MACRS year1- 33.33%, year 2- 44.45%, year 3 - 18.81%

1. If the tax rate is 23% what is the year 0 net cash flow? Year 1? Year 2? Year 3?

2. If the required return is 12% what is the projects NPV?