Quad enterprises is considering a new three-year expansion


Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.52 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life and is estimated to have a market value of $294584 at the end of the project. The project is estimated to generate $2146553 in annual sales, with costs of $809789. The project requires an initial investment in net working capital of $360133. If the tax rate is 30 percent and the required return on the project is 12 percent, what is the project's NPV?

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Financial Management: Quad enterprises is considering a new three-year expansion
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