Down Under Boomerang, Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4,200,000. 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 $3,450,000 in annual sales, with costs of $1,612,500. The tax rate is 35 percent and the required return is 10 percent. What is the project’s NPV?

In the previous problem, suppose the project requires an initial investment in net working capital of $450,000 and the fixed asset will have a market value of $575,000 at the end of the project. What is the project's Year 0 net cash flow? Year 1? Year 2? Year 3? What is the new NPV?