Question: Saved Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.4 million. The fixed asset falls into




Saved Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.4 million. The fixed asset falls into the 3-year MACRS class MACRS Table and will have a market value of $495,600 after 3 years. The project requires an initial investment in net working capital of $708,000. The project is estimated to generate $5,664,000 in annual sales, with costs of $2,265,600. The tax rate is 22 percent and the required return on the project is 13 percent. What is the project's year O net cash flow? Year 1 Property Class Three-Year Five-Year 33.33% 20.00% 44.45 32.00 14.81 19.20 7.41 11.52 11.52 5.76 3 - N 4 ) CO O Seven-Year 14.29% 24.49 17.49 12.49 8.93 8.92 8.93 4.46 7 BI What is the project's year 1 net cash flow? What is the project's year 2 net cash flow? What is the project's year 3 net cash flow? What is the NPV?
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