Question: Please explain how you got your answer, without excel. Preferrably a calculator. Im trying to understand it. Thank you Down Under Boomerang, Inc., is considering
Please explain how you got your answer, without excel. Preferrably a calculator. Im trying to understand it. Thank you
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.49 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,010,000 in annual sales, with costs of $719,000. The project requires an initial investment in net working capital of $230,000, and the fixed asset will have a market value of $295,000 at the end of the project.
a. If the tax rate is 22 percent, what is the projects Year 1 net cash flow? Year 2? Year 3?
b If the required return is 16 percent, what is the project's NPV
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