Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,180,000 in annual sales, with costs of $855,000. The project requires an initial investment in net working capital of $400,000, and the fixed asset will have a market value of $260,000 at the end of the project.

a.	If the tax rate is 25 percent, what is the projects Year 1 net cash flow? Year 2? Year 3?

b.	If the required return is 9 percent, what is the project's NPV?