Down Under Boomerang Inc. is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.268 million.
The fixed asset falls into the 3-year MACRS class (MACRS Table). The project is estimated to generate $2016000 in annual sales with costs of
$806400. The tax rate is 33 percent and the required return is 18 percent. The project requires an initial investment in net working capital
of $252000 and the fixed asset will have a market value of $176400 at the end of the project.
What is the net cash flow for Years 0-4?
What is the NPV for the project?