Problem:
Down Under Boomerang, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.4 million. The fixed asset will be depreciated straight-line zero over its three year life, after which it will be worthless. The project is estimated to generate $ 1,120,000 in annual sales, with costs of $480,000. The tax rate is 35 percent and the required return is 12 percent.
Required:
Question: What is the projects NPV?
Note: Explain all steps comprehensively.