Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset falls into the three-year MACRS class (MACRS schedule). Theproject is estimated to generate $1,645000 in annual sales, with costs of $610,000. The project requires an initial investment in net working capital of 180 000, and the fixed asset will have a market value of $420,000 atthe end of the project. a. If the tax rate is 21 percent, what is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculationsand enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1, 234, 567.89.) b. If the required return is 12 percent, what is the project's NPV? (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1, 234, 567.89.)

The objective of the question is to calculate the net cash flow for each year of the project and the…

Answered: Esfandairi Enterprises is considering a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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please fix and given me the accurate answer
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Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1730000 million in annual sales, with costs of $640,000. The tax rate is 24 percent. If the required return is 13 percent, what is the project's NPV? please answer fast i give upvote

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