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 $2.58 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 is estimated to generate $2,040,000 in annual sales, with costs of $735,000. The tax rate is 34 percent and the required return on the project is 15 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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