Question: Problem 6-3 Calculating Project NPV Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.67

Problem 6-3 Calculating Project NPV Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.67 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 $2,070,000 in annual sales, with costs of $765,000. The tax rate is 34 percent and the required return is 13 percent. What is the project's NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $110,344.53 Hints eBook &Resources Hint#1 References Worksheet Difficulty: 1 Basic Problem 6-3 Calculating ProjectSection: 6.2 The Baldwin Company: An Example NPV 20 F3 F6 F5 F4 F2 F1 3 4 56

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