Question: Answer the question 11 please 10. Calculating Project OCF Bush Boomerang, Inc., is considering a new three- year expansion project that requires an initial fixed

Answer the question 11 please 10. Calculating Project OCF Bush Boomerang,

Answer the question 11 please

10. Calculating Project OCF Bush Boomerang, Inc., is considering a new three- year expansion project that requires an initial fixed asset investment of $2.1 mil- lion. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to gener- ate $1,900,000 in annual sales, with costs of $850,000. If the tax rate is 35 per- cent, what is the OCF for this project? Calculating Project NPV In the previous problem, suppose the required re- turn on the project is 15 percent. What is the project's NPV? 11

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