Requires an initial fixed asset investment

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Reference no: EM132041465

Summer Tyme, Inc., is considering a new 4-year expansion project that requires an initial fixed asset investment of $3.672 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $3,264,000 in annual sales, with costs of $1,305,600.

Required: If the tax rate is 35 percent, what is the OCF for this project? $1,673,973 $1,958,400 $1,594,260 $1,514,547 $676,260.

Reference no: EM132041465

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