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XYZ Company is considering a new 3-year expansion project that requires an initial fixed asset...

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Finance

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XYZ Company is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.27 million. The fixed asset will be depreciated straight- line to zero over its 3-year tax life. The project is estimated to generate $1,800,000 in annual sales, with costs of $710,000. The project requires an initial investment in net working capital of $430,000, and the fixed asset will have a market value of $450,000 at the end of the project. If the tax rate is 23 percent, what is the project's Year O net cash flow? O $1,686,667 0.-$2.270,000 -$2.700,000

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