Modular Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $2,190,000. 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 $2,900,000 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. Tax rate is 21% and the required return on the project is 13%.

What is the annual after-tax operating cash flow for this project?

$1,272,917

$1,800,450

$1,746,250

What is the terminal year non-operating cash flow?

$210,000

$457,500

$465,900

What is the IRR of the project?

51.52%

56.03%

53.43%