What is the project year three net cash flow

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Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.4 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $420,000. The project requires an initial investment in net working capital of $600,000. The project is estimated to generate $4,800,000 in annual sales, with costs of $1,920,000. The tax rate is 23 percent and the required return on the project is 9 percent.

Question 1: What is the project's Year 0 net cash flow?

Question 2: What is the project's Year 1 net cash flow?

Question 3: What is the project's Year 2 net cash flow?

Question 4: What is the project's Year 3 net cash flow?

Question 5: What is the NPV?

Reference no: EM132596928

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