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I need the Year 3 Cash Flow and NPV. Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed
I need the Year 3 Cash Flow and NPV.
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.46 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,000,000 in annual sales, with costs of $711,000. The project requires an initial investment in net working capital of $220,000, and the fixed asset will have a market value of $300,000 at the end of the project If the tax rate is 35 percent and the required return is 16 percent, what is the project's Year 1 net cash flow? Year 2? Year 3? (Use MACRS) (A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Cash Flow Years Year 0 Year 1 Year 2 Year 3 $ -2680000 $ 1124821 $ 1220565 What is the project's NPV? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPVStep by Step Solution
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