The Market Place is considering a new four-year expansion project that requires an initial fixed asset investment of $2.8 million. The fixed asset will be depreciated straight-line to zero over its four-year tax life, after which time it will have a market value of $625,000. The project requires an initial investment in net working capital of $270,000, all of which will be recovered at the end of the project. The project is estimated to generate $2,550,000 in annual sales, with costs of $1,638,000. The tax rate is 34 percent and the required return for the project is 14 percent.

What is the cash flow in year 0?

What is the cash flow in year 1?

What is the cash flow in year 4?

What is the net present value?

Will the company accept this project?