Please can you answer the question with explanation Quad Enterprises is considering a new three-year expansion project that requires an initial fixed assetinvestment of $2.9 million. The fixed asset will be depreciated on a three-year MACRS schedule. Theproject is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The projectrequires an initial investment in net working capital of $300,000, and the fixed asset will have a marketvalue of $210,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2?Year 3? The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV?46.Asset investment2$Estimated annual sales $24$4242,900,0002,190,000815,000300,00078.CostsNet working capitalPretax salvage value9210,00021%1011Tax rateProject and asset life13 Required returnMACRS percentages1212%1415Year 10.333316Year 20.444517Year 30.14811819 20 Complete the following analysis. Do not hard code values in your calculations. You must usethe built-in Excel function to calculate the NPV.2122 Sales23 Costs24 DepreciationEBT26 Taxes2527Net income28Fixed asset book valuein three years29303132 Aftertax salvage valueSell equipmentTaxes333435Aftertax cash flow3637 Capital spendingNet working capital39 OCF3840Net cash flow4142NPV43Sheet1...囲-+14%READY

NPV means PV of net benefits which will arise from the projects over the life. It is computed by…

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated on a three-year MACRS schedule. The 3 project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $210,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? 4 Asset investment %24 2,900,000 2,190,000 815,000 Estimated annual sales $ 8 Costs 24 $ Net working capital Pretax salvage value Tax rate 300,000 24 210,000 21% 10 11 Project and asset life Required return MACRS percentages 12 3. 13 12% 14 15 Year 1 0.3333 16 Year 2 0.4445 17 Year 3 0.1481 18 19