Considering new three-year expansion project

Assignment Help Financial Management

Reference no: EM131888634

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,140,000 in annual sales, with costs of $823,000. The project requires an initial investment in net working capital of $360,000, and the fixed asset will have a market value of $240,000 at the end of the project. If the tax rate is 35 percent and the required return is 10 percent, what is the project’s Year 1 net cash flow? Year 2? Year 3? (Use MACRS) (A negative answer should be indicated by a minus sign. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Reference no: EM131888634

Questions Cloud

What is the value of a share of BMI : Benchmark Metrics Inc.? (BMI), an? all-equity financed? firm, reported EPS of $5.77. What is the value of a share of BMI at the start of 2014? (end of? 2013)?

What are chances that the child would have disease : Assume that Tay-Sachs disease only affects homozygous recessive individuals. If two parents are carriers, what are chances that their child would have disease?

Discuss the factors you consider when making decision : Identify and briefly discuss the factors you consider when making your decision.

Analyze the potential impact that environmental factors : Provide a comprehensive review of your child's development through the stages of infancy/toddlerhood, preschool, and early elementary.

Considering new three-year expansion project : Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.88 million.

What other hybrid applications are there : A firm has a total cost of TC=0.5q2+15q+300 where q is its output, and faces a demand for its product given by q=100-3p where p is the price it charges.

What is the total amount of atp produced in glycolysis : What is the total amount of ATP produced in Glycolysis? How many times does the Citric Acid Cycle turn to produce 6 NADH?

Discuss about a different kind of childhood trauma : How common is it for children to experience this kind of trauma? Are there specific effects that result from this kind of childhood trauma?

How can you prepare children for measuring time : Give examples of change that pertains to children in each of the following areas: in school; in the neighborhood or community; in nature; in children.

User Account

All Pages