Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.5 million. The fixed asset will be depreciated straight-line to zero over its five-year tax life. At the end of the project, the asset can be sold for $300,000. The project also requires $800,000 net working capital at the beginning of the project. The project is estimated to generate $1.2 million in annual sales, with costs of $500,000. The tax rate is 40%. Answer the following questions. (Round your final answer to the nearest integer.

1. What is the operating cash flow in each year of the project? (Use the tax shield approach.)

A. 420000

B. 120000

C. 300000

D. 540000

2. What is the aftertax salvage value of the fixed asset?

A. 300000

B. 120000

C. 420000

D. 180000

3. What is the cash flow from changes in net working capital in year 0 and year 3?

A. -800000, 0

B. 0, 800000

C. -800000, 800000

D. 800000, -800000