What is the project year 0 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 $2.862 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 $222,600. The project requires an initial investment in net working capital of $318,000. The project is estimated to generate $2,544,000 in annual sales, with costs of $1,017,600. The tax rate is 23 percent and the required return on the project is 9 percent.

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

Reference no: EM132684933

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