SHOW WORK FIN 325 2. Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2,350,000. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,860,000 in annual sales, with costs of $1,850,000. The project requires an initial investment in net working capital of $176,000, and the fixed asset will have a market value of $211,000 at the end of the project. Assume that the tax rate is 25 percent and the required return on the project is 11 percent. a. What are the net cash flows of the project each year? b. What is the NPV/IRR of the project? c. Is the project a GO or NO GO? Why? INT: Use the Pro Forma Income Statement Approach OTEWELL: This is an ALGO problem your numbers may be different. (2) Part 2 \begin{tabular}{|c|c|c|} \hline Deprecitaion Calcutation (5traight Line or MACRS) \\ \hline Year Pertantage (W) & Depreciation (3) \\ \hline 1 & & \\ \hline 2 & & \\ \hline 3 & & \\ \hline \multicolumn{2}{|c|}{2rr Cum Degreciation } & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|c|}{ Cash Flows } \\ \hline Operating Cash Flow & & \\ \hline Changes in NWC \\ Net Capital Spending & & \\ Net Salvage Cash Flow & & \\ \hline Cash Flow From Aasets & & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Tax Rate & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Net Present Value & \\ \hline IRR & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Required Return & \\ \hline GO or NO QO? & \\ \hline \end{tabular} Chapler 9 - InClail-tandou:-Exct