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Down Under Boomerang, Inc, is considering requires an initial fixed asset investment of $2.33 million. The fixed asset falls into the 3- year MACRS class
Down Under Boomerang, Inc, is considering requires an initial fixed asset investment of $2.33 million. The fixed asset falls into the 3- year MACRS class (MACRS schedule). The project is estimated to generate $1,735,000 in annual sales, with costs of $640,000. The project requires an initial investment in net working capital of $300,000, and the fixed asset will have a market value of $255,000 at the end of the project. new 3-year expansion project that a a. If the tax rate is 25 percent, what is the project's Year 0 net cash flow?Year 1? Year 2? Year 3? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) b. If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to two decimal places, e.g., 1,234,567.89.) Year 0 cash flow a. Year 1 cash flow Year 2 cash flow Year 3 cash flow NPV b
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