Corporate Finance (10th) Ross, Stephen A.; Ross, Stephen; Westerfield, Randolph; Jaffe, Jeffrey F.; Jaffe, Jeffrey ISBN: 0078034779 ISBN13: 9780078034770

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.94 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,160,000 in annual sales, with costs of $839,000. The project requires an initial investment in net working capital of $380,000, and the fixed asset will have a market value of $250,000 at the end of the project.

If the tax rate is 34 percent and the required return is 10 percent, what is the projects Year 1 net cash flow? Year 2? Year 3? (Use MACRS) (Enter your answers in dollars, not millions of dollars, i.e. 1,234,567. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16))