Question
Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.994 million. The fixed asset falls
Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.994 million. The fixed asset falls into the 3-year MACRS class (MACRS Table) and will have a market value of $466,200 after 3 years. The project requires an initial investment in net working capital of $666,000. The project is estimated to generate $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 33 percent and the required return on the project is 15 percent. 1. The net cash flow in Year 0 is $ 2. The net cash flow in Year 1 is 3. The net cash flow in Year 2 is $ 4. The net cash flow in Year 3 is $The NPV for this project is $
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