Depreciated straight-line over its three-year tax life

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Reference no: EM131334277

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.3 million. The fixed asset will be depreciated straight-line over its three-year tax life, and the fixed asset will have a market value of $270641 at the end of the project. The project is estimated to generate $2099003 in annual sales, with costs of $893573. The project requires an initial investment in net working capital of $377872. If the tax rate is 32 percent and the required return on the project is 9 percent, what is the project's Year 0 net cash flow?

Reference no: EM131334277

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