Depreciated straight-line to zero over three-year tax life

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Reference no: EM131547063

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,370,000. 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 $2,240,000 in annual sales, with costs of $1,230,000. If the tax rate is 35 percent, what is the OCF for this project?

Reference no: EM131547063

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