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Down Under Boomerang Inc is considering a new three year expansion project that requires an initial fixed asset investment of 258 million The fixed asset will be depreciated straight line to

Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.58 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 $2,040,000 in annual sales, with costs of $735,000. The tax rate is 34 percent and the required return is 15 percent.

What is the project’s NPV?

 

Sep 07 2020 View more View Less

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