Fixed asset will be depreciated straight-line to zero

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Reference no: EM131033304

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,180,000 in annual sales, with costs of $875,000. The project requires an initial investment in net working capital of $400,000, and the fixed asset will have a market value of $260,000 at the end of the project. If the tax rate is 30 percent, complete the following cash flow chart:

Years Cash Flow

Year 0 $

Year 1 $

Year 2 $

Year 3 $

Reference no: EM131033304

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