Project requires initial investment in net working capital

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Reference no: EM13870892

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,110,000 in annual sales, with costs of $799,000. The project requires an initial investment in net working capital of $330,000, and the fixed asset will have a market value of $225,000 at the end of the project.

cash flow

Year 0:

Year 1:

Year 2:

Year 3:

NPV:

Reference no: EM13870892

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