In: Finance
Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.89 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 $147,000. The project requires an initial investment in net working capital of $210,000. The project is estimated to generate $1,680,000 in annual sales, with costs of $672,000. The tax rate is 24 percent and the required return on the project is 11 percent. Find the NPV using years 0-3.