Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,110,000 in annual sales, with costs of $799,000. The project requires an initial investment in net working capital of $330,000, and the fixed asset will have a market value of $225,000 at the end of the project. If the tax rate is 35 percent, what is the project's year 1 net cash flow? Year 2? Year 3? Table 8.3. (Enter your answers in dollars, not millions of dollars (e.g., 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).) Year 0 Year 1 Year 2 Year 3 Cash Flow $ -3,120,000.0 1,311,000 If the required return is 12 percent, what is the project's NPV? (Enter your answer in dollars, not millions of dollars (e.g., 1,234,567). Do not round intermediate calculations and round your final answer to 2 decimal places (e.g., 32.16).) YEAR 1 23 2 3 4567 8 9 10 11 12 13 14 15 16 17 18 19 20 21 3 YEARS 3333 4445 1481 0741 RECOVERY PERIOD CLASS 5 YEARS 2000 .3200 1920 1152 1152 .0576 7 YEARS .1429 2449 .1749 1249 0893 0892 0893 0446 10 YEARS .1000 .1800 1440 1152 .0922 .0737 .0655 0655 .0656 .0655 .0328 15 YEARS .0500 .0950 0855 .0770 .0693 .0623 .0590 .0590 0591 .0590 .0591 0590 .0591 0590 .0591 .0295 20 YEARS 03750 .07219 06677 06177 05713 05285 04888 04522 04462 04461 04462 04461 04462 .04461 04462 04461 04462 04461 04462 04461 02231 Depreciation is expressed as a percent of the asset's cost. These schedules are based on the IRS publication 946. How to Depreciate Property and other details on depreciation are presented later in the chapter. Note that five-year depreciation actually carries over six years because the IRS assumes purchase is made in midyear.