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8.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, after which it will be worthless. 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.

What is the project’s NPV? (Do not round intermediate calculations
and round your answer to 2 decimal places, e.g., 32.16.)

9.The Best Manufacturing Company is considering a new investment.
Financial projections for the investment are tabulated here. The
corporate tax rate is 35 percent. Assume all sales revenue is received
in cash, all operating costs and income taxes are paid in cash, and all
cash flows occur at the end of the year. All net working capital is
recovered at the end of the project.
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FIN 571 Week 5 DQ 1 (UOP Course)

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