Down Under Boomerang, Inc., Is Considering A New ... | Chegg.com

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.76 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,100,000 in annual sales, with costs of $795,000. The tax rate is 34 percent and the required return is 12 percent. The project requires an initial investment in net working capital of $320,000, and the fixed asset will have a market value of $220,000 at the end of the project.

What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3?

Please answer the following:

Years Cash Flow

Year 0 $________

Year 1 $________

Year 2 $________

Year 3 $________

What is the NPV?