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

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Finance

Down Under Boomerang, Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which it will be worthless. The project is estimated to generate $2,050,000 in annual sales, with costs of $950,000. The tax rate is 35% and the required return is 12 percent. There is also an initial investment in Net Working Capital of $285,000, and the fixed asset will have a market value of $225,000 at the end of the project. What is the NPV and IRR?

**Please also state what the book value would be, given this information, in addition to the NPV and IRR***

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