Considering new three-year expansion 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 estimated to generate $2,190,000in annual sales, with costs of $815,000. If the tax rate is 35 percent, what is the OCF for this project? Suppose the required return on the project is 12 percent. What is the project NPV?

Reference no: EM131327309

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