Question: previous expert solved this wrong as you can see on the photograph, could you please give me the right solution along with the explanation? Esfandairi
previous expert solved this wrong as you can see on the photograph, could you please give me the right solution along with the explanation?


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). The project is estimated to generate $1.645 million in annual sales, with costs of $610,000. The project requires an initial investment in net working capital of $250,000, and the fixed asset will have a market value of $180,000 at the end of the project. The tax rate is 21 percent. a. 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 calculations and enter your answers in dollars, not millions of dollars, rounded to 2 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 calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) \begin{tabular}{|cccc|} \hline \multicolumn{4}{c|}{ Property Class } \\ \hline Year & Three-Year & Five-Year & Seven-Year \\ \hline 1 & 33.33% & 20.00% & 14.29% \\ 2 & 44.45 & 32.00 & 24.49 \\ 3 & 14.81 & 19.20 & 17.49 \\ 4 & 7.41 & 11.52 & 12.49 \\ 5 & & 11.52 & 8.93 \\ 6 & & 5.76 & 8.92 \\ 7 & & & 8.93 \\ 8 & & & 4.46 \\ \hline \end{tabular}
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