What is the projects year one net cash flow

Assignment Help Financial Management

Reference no: EM131045219

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $2,170,000 in annual sales, with costs of $847,000. The project requires an initial investment in net working capital of $390,000, and the fixed asset will have a market value of $255,000 at the end of the project.

If the tax rate is 35 percent, what is the project’s year 1 net cash flow? Year 2? Year 3?

Reference no: EM131045219

Questions Cloud

A bond is issued with coupon : A bond is issued with a coupon of 4% paid annually, a maturity of 30 years, and a yield to maturity of 7%. What rate of return will be earned will be earned by an investor who purchases the bond for $627.73 and holds it for 1 year if the bond's yield..

Forest and landscape of a large tract of public land : The National Park Service is considering two plans for rejuvenating the forest and landscape of a large tract of public land. The study period is indefinitely long, and the Park Service's MARR is 9% per year. You have been asked to compare the two pl..

Find the relationship between the regularization parameter ? : Find the relationship between the regularization parameter λ in the ridge formula, and the variances τ and σ2

Explain how move company to the new safety standards : Provide a rationale for the company to adopt or alter its safety management processes. Try to be more specific than merely saying that the company can afford to be safer. For example, you may give an indication of the cost of illnesses or injuries..

What is the projects year one net cash flow : Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.97 million. The fixed asset falls into the three-year MACRS class. The project requires an initial investment in net w..

Researchers expected the population of responses : From previous work, the researchers expected the population of responses to be Normal. The insects are a random sample from a cockroach population grown in the laboratory. A 90% confidence interval for the mean amount of d-glucose in cockroach hin..

Stock certificate evidencing his ownership of shares : In April, Cranson was asked to invest in a new business corporation that was about to be created. He agreed to purchase stock and to become an officer and director. After his attorney advised him that the corporation had been formed under the laws..

Prepare a powerpoint presentation of walmart company : Prepare a 10 - 12 slide PowerPoint presentation of WALMART COMPANY. Consider your audience to be management of the case study company.

Is your portfolio less risky or more risky than market index : Your portfolio is diversified. It has an expected return of 11.0% and a beta of 1.10. You want to add 300 shares of Kraft Foods Inc at $40 a share to your portfolio. Calculate the expected beta on the portfolio after you have added Kraft Foods Inc's ..

User Account

All Pages