Expansion project-require initial fixed asset investment

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Reference no: EM131321445

H. Cochran, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,460,000. 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 $2,270,000 in annual sales, with costs of $1,260,000.

If the tax rate is 35 percent, what is the OCF for this project?

Reference no: EM131321445

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