Expansion project that requires initial fixed asset

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Reference no: EM132030414

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2474000. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $2389000 in annual sales, with costs of $1630000. If the tax rate is 0.31 , what is the OCF for this project?

Reference no: EM132030414

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