Question

Down Under Boomerang, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2.29 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life. The project is estimated to generate $1,715,000 in annual sales, with costs of $625,000. The project requires an initial investment in net working capital of $260,000, and the fixed asset will have a market value of $195,000 at the end of the project.

a.	If the tax rate is 21 percent, what is the project’s Year 0 net cash flow? Year 1? Year 2? Year 3? (Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, e.g., 1,234,567. A negative answer should be indicated by a minus sign.)
b.	If the required return is 9 percent, what is the project's NPV? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

I have gotten a Year 0 Cash Flow of -2,550,000
Year 1 CF of 937,064.23
Year 2 CF of 859,691.95
Year 3 CF of 1,108,430.80
And an NPV 355,186.94

My assignment says that the Year 0 CF and the NPV are correct, but all of the other Cash Flows are incorrect. But the sum (NPV) is correct, so I'm not sure what I'm doing wrong.

Answer 1