Business, 13.04.2021 04:00 yulimariu27

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.46 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,000,000 in annual sales, with costs of $711,000. The project requires an initial investment in net working capital of $220,000, and the fixed asset will have a market value of $300,000 at the end of the project. 1. If the tax rate is 35 percent, what is the project's Year 0 net cash flow?
2. If the required return is 16%, what is the project's NPV?

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