Calculating NPV-Excel 7 x FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW Sign In 19 11 ' 1 Calibri Paste BIU Alignment Number Conditional Format as Cell Cells Editing Formatting Table Styles" Clipboard Font Styles H17 x $x AB C D E F G 2 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 straight-line to zero over its three-year tax life. The 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 S 6 Asset investment $ 2,900,000 7 Estimated annual sales $ 2,190,000 8 Costs $ 815,000 9 Net working capital $ 300,000 10 Pretax salvage value $ 210,000 11 Tax rate 21% 12 Project and asset life 3 13 Required return 12% 14 15 16 Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel function to calculate the NPV. 17 18 Aftertax salvage value 19 20 Sell equipment Taxes 21 Aftertax cash flow 22 23 Sales 24 Costs 25 Depreciation 26 EBT 27 Taxes 28 Net income 29 30 Capital spending 31 Net working capital 32 OCF 33 Net cash flow 34 35 NPV 36 37 Sheet1