Quad Enterprises is considering a new three-year expansion project that requires an initial fixed assetinvestment of $2.46 million. The fixed asset will be depreciated straight-line to zero over its three-year taxlife, after which time it will be worthless. The project is estimated to generate $2,000,000 in annual sales,with costs of $695,000. The project requires an initial investment in net working capital of $220,000, and thefixed asset will have a market value of $300,000 at the end of the project. If the tax rate is 35 percent, whatis the project's Year 0 net cash flow? Year 1? Year 2? Year 3? (Do not round intermediate calculations.Enter your answers in dollars, not millions of dollars, e.g. 1,234,567. Negative amounts should beindicated by a minus sign.)YearsCash FlowYear 0Year 1Year 2Year 3%24If the required return is 16 percent, what is the project's NPV? (Do not round intermediate calculationsand round your final answer to 2 decimal places, e.g., 32.16.)NPV

Net Present Value: It is the present worth of the annual cash flows (including the initial cost of…

Years Cash Flow Year 0 Year 1 Year 2 24 Year 3 If the required return is 16 percent, what is the project's NPV? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Years Cash Flow Year 0 Year 1 Year 2 24 Year 3 If the required return is 16 percent, what is the project's NPV? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 17P

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