Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.31 million. The fixed asset falls into the three-year MACRS class (MACRS schedule). The project is estimated to generate $1,785,000 in annual sales, with costs of $680,000. The project requires an initial investment in net working capital of $400,000, and the fixed asset will have a market value of $405,000 at the end of the project. a) if the tax rate is 25 percent, what is the projects Year 0 net cash flow? Year 1? Year 2? Year 3?

b) if the required return is 11 percent, what is the project's NPV?