please fix and given me the accurate answer Esfandairi Enterprises is considering a new three-year expansion project that requires aninitial fixed asset investment of $2.18 million. The fixed asset qualifies for 100 percentbonus depreciation in the first year. The project is estimated to generate $1.645 million inannual sales, with costs of $610,000. The project requires an initial investment in networking capital of $250,000, and the fixed asset will have a market value of $180,000 atthe end of the project. The tax rate is 21 percent.a. What is the project's Year O net cash flow? Year 1? Year 2? Year 3? (A negative answershould be indicated by a minus sign. Do not round intermediate calculations andenter your answers in dollars, not millions of dollars, e.g., 1,234,567.)b. If the required return is 12 percent, what is the project's NPV? (Do not roundintermediate calculations and enter your answer in dollars, not millions ofdollars, rounded to 2 decimal places, e.g., 1,234,567.89.)× Answer is complete but not entirely correct.Za. Year 0 cashflowa. Year 1 cashflowa. Year 2 cashflowa. Year 3 cashflowb. NPV$EA-2,430,000EA$970,250EAEA$970,250$1,362,450 x$179,537.00 X

Now, let's take a closer look at the calculations. a. Net cash flow in Year 0: Initial investments…

Answered: Esfandairi Enterprises is considering a…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 4P

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