Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed...

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Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.29 million. The fixed asset falls into the 3-year MACRS class(MACRS schedule). The project is estimated to generate $1,810,000in annual sales, with costs of $700,000. The project requires aninitial investment in net working capital of $450,000, and thefixed asset will have a market value of $480,000 at the end of theproject.
a. If the tax rate is 25 percent, what is the project’s Year 0net cash flow? Year 1? Year 2? Year 3? (A negative answer should beindicated by a minus sign. Do not round intermediate calculationsand enter your answers in dollars, not millions of dollars, roundedto two decimal places, e.g., 1,234,567.89.)
b. If the required return is 12 percent, what is the project'sNPV? (Do not round intermediate calculations and enter your answerin dollars, not millions of dollars, rounded to two decimal places,e.g., 1,234,567.89.)

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Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.29 million. The fixed asset falls into the 3-year MACRS class(MACRS schedule). The project is estimated to generate $1,810,000in annual sales, with costs of $700,000. The project requires aninitial investment in net working capital of $450,000, and thefixed asset will have a market value of $480,000 at the end of theproject.a. If the tax rate is 25 percent, what is the project’s Year 0net cash flow? Year 1? Year 2? Year 3? (A negative answer should beindicated by a minus sign. Do not round intermediate calculationsand enter your answers in dollars, not millions of dollars, roundedto two decimal places, e.g., 1,234,567.89.)b. If the required return is 12 percent, what is the project'sNPV? (Do not round intermediate calculations and enter your answerin dollars, not millions of dollars, rounded to two decimal places,e.g., 1,234,567.89.)