Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 million. The fixed asset will be depreciated, using straight-line depreciation, over its three-year tax life. The project is estimated to generate $2,120,000 in annual sales, with costs (excluding depreciation) of $815,000. The project requires an initial investment in net working capital of $340,000, and the fixed asset will have a market value of $230,000 at the end of the project. Assume that the tax rate is 30 percent.

Calculate the annual operating cash flow for years 1, 2, and 3.

(Operating cash flow = (Sales Costs) x (1 tax rate) + Depreciation x tax rate)