D20 A B C D E F H I J 2 3 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, after which time it will be worthless. The project is estimated to generate $2,190,000 in annual sales, with costs of $815,000. The tax rate is 21 percent. If the required return is 12 percent, what is the project's NPV? 6 7 S Asset investment Estimated annual sales Costs Tax rate Project and asset life Required return 2,900,000 2,190,000 815,000 21% 3 12% 9 LO LI 12 Complete the following analysis. Do not hard code values in your calculations. S 14 15 16 17 18 19 2,190,000 815,000 Sales Costs Depreciation EBT A B G H I 6 7 S S S 8 Asset investment Estimated annual sales Costs Tax rate Project and asset life Required return D E 2,900,000 2,190,000 815,000 21% 3 12% 10 11 12 13 Complete the following analysis. Do not hard code values in your calculations. S 2,190,000 815,000 15 16 17 18 19 20 21 22 23 24 25 Sales Costs Depreciation EBT Taxes Net income OCF NPV 26 27 28