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Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.4 million. The fixed asset will
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of
$1.4 million. The fixed asset will be depreciated straight-line to zero over its three year tax life, after which it will be worthless. The project is estimated to generate $1,120,000 in annual sales, with costs of $480,000.The tax rate is 35 percent and the required return is 12 percent.
What is the projects NPV?
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