Suppose the required return on the project

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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. If the tax rate is 35 percent, what is the OCF for this project?

In the previous problem, suppose the required return on the project is 12 percent. What is the project's NPV?

Reference no: EM132058692

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