2. Calculating Project NPV The Freeman Manufacturing Company is considering a new investment Financial projections for the investment are tabulated below. The corporate tax rate is 34 percent Assume all sales revenue is received in cash, all operating costs and income taxes are paid in cash,a all cash flows occur at the end of the year. All net working capital is recovered at the end of the projet YEAR O YEAR 1 YEAR 2 YEAR 3 YEAR 4 Investment Sales revenue Operating costs Depreciation Net working capital spending $31,000 $14,200 $15,900 $15,700 $12,900 2,1002,100 2,1002,100 7,750 7,750 7,750 7,750 450 175 250 275 a. Compute the incremental net income of the investment for each year b. Compute the incremental cash flows of the investment for each year c. Suppose the appropriate discount rate is 12 percent. What is the NPV of the project? 3. Calculating Project NPV Down Under Boomerang, Inc, is considering a new three-year expansion project that requires an initial fixed asset investment of $3,950,000. The fixed asset will be deprecil straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $3,175 and the required return is 10 percent. What is the project's NPV? ,000 in annual sales, with costs of $1,455,000. The tax rate is 35 perce e project requires a market value ina Proiect Cash Flow from Assets In the previous proble of20 and the