Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.64 million.The fixed asset falls into the three-year MACRS class.The project is estimated to generate $2,060,000 in annual sales, with costs of $759,000.The project requires and initial investment in net working capital of $280,000, and the fixed asset will have a market value of $270,000 at the end of the project.

If the tax rate is 35 percent what is the project's Year 1 net cash flow?Year 3?Table 8.3.

Cash Flow

Year0$

Year1$

Year2$

Year3$

If the required return is 13 percent,what is the project's NPV?

NPV$