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Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.42 million. The fixed asset will

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Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.42 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which it will be worthless. The project is estimated to generate $1.09 million in annual sales, with costs of $475,000. The project requires an initial investment in net working capital of $250,000 and the fixed asset will have a market value of $230,000 at the end of the project. a. If the tax rate is 25 percent, what is the project's Year 0 net cash flow? Year 12 Year 2? Year 3? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89. A negative answer should be indicated by a minus sign. Round your answer to 2 decimal places, e.g., 32.16.) b. If the required return is 12 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89.) Amount a. Year 0 cash flow Year 1 cash flow Year 2 cash flow Year 3 cash flow b. NPV

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