What is the projects year zero net cash flow

Assignment Help Financial Management

Reference no: EM131527514

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.82 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,120,000 in annual sales, with costs of $815,000. The tax rate is 30 percent and the required return is 12 percent. The project requires an initial investment in net working capital of $340,000, and the fixed asset will have a market value of $230,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? (Do not round intermediate calculations. A negative answer should be indicated by a minus sign.) Years Cash Flow Year 0 $ Year 1 $ Year 2 $ Year 3 $ What is the NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV $

Reference no: EM131527514

Questions Cloud

Compute the incremental net income of the investment : The Best Manufacturing Company is considering a new investment. Compute the incremental net income of the investment for each year.

What is the amount of net income for january : On January 2, 2006, Lela Peterson established Acadia Realty, which completed the following transactions during the month.

Common for criminals : It is becoming more common for criminals to use mobile computing devices in their criminal activities.

Create a timeline for each of the civilizations : Create a timeline for each of the following civilizations, listing any major events in the civilization's history.

What is the projects year zero net cash flow : Down Under Boomerang, Inc., is considering a new three-year expansion project. What is the project's Year 0 net cash flow?

What sorts of people should be on a sirt : What sorts of people should be on a SIRT? and what actions should a SIRT be responsible for?

Briefly discuss the motive for starting a captive : Define a captive and briefly discuss the motive for starting a captive. How should insurance be prioritized in the list of risk management techniques?

Element in an array a of n elements : Design a recursive method for finding the largest element in an array A of N elements. Characterize its run-time and space efficiency.

Prepare a trial balance for ingres designs : On July 1, 2006, Leon Cruz established an interior decorating business, Ingres Designs. During the remainder of the month, Leon Cruz completed.

User Account

All Pages