68.

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 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 $2,120,000 in annual sales, with costs of $815,000. The tax rate is 30 percent and the required return on the project is 12 percent. What is the projects NPV? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

70.Global Enterprises has spent $134,000 on research developing a new type of shoe. For this shoe to now be manufactured, the firm will need to expand into an empty building that it currently owns. The firm was offered $229,000 last week for that building. An additional $342, 000 will be required for new equipment and building improvements. Labor and material costs are estimated at $4.98 per pair of shoes. Interest expense on the loan needed to finance the production of this new shoe will be $17,800 a year. Which one of these correctly identifies the sunk costs? $229,000 value of the building $134,000 for research $229,000 value of the building plus $342,000 for new equipment and improvements $17,800 for interest plus $134,000 for research $229,000 for the building plus $134,000 for research