Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,310,000. The fixed asset falls into the three-year MACRS class (MACRS Table). The project is estimated to generate $2,220,000 in annual sales, with costs of $1,210,000. The project requires an initial investment in net working capital of $157,000, and the fixed asset will have a market value of $182,000 at the end of the project. Assume that the tax rate is 30 percent and the required return on the project is 11 percent.

Requirement 1:

What is the net cash flow of the project for the following years?

Year 0 ____?

Year 1_____?

Year 2 ____?

Year 3_____?

Requirement 2:

What is the NPV of the project?