Down Under Boomerang, Inc., is considering a new three-year
expansion project that requires an initial fixed asset investment
of $2.61 million. The fixed asset will be depreciated straight-line
to zero over its three-year tax life, after which time it will be
worthless. The project is estimated to generate $2,050,000 in
annual sales, with costs of $745,000. The project requires an
initial investment in net working capital of $270,000, and the
fixed asset will have a market value of $275,000 at...