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.

A)

If the tax rate is 23 percent, what is the projects Year 1 net cash flow? Year 2? Year 3?

B)

If the required return is 12 percent, what is the project's NPV?

A)	Year 0 Cash Flow	$_____________
	Year 1 Cash Flow	$_____________
	Year 2 Cash Flow	$_____________
	Year 3 Cash Flow	$_____________
B)	NPV	$_____________