What is the annual operating cash flow

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Potato Game, Inc. is considering a new five-year expansion project that requires an initial fixed asset investment of $6.089 million. The fixed asset will be depreciated straight-line to zero over the project's life, after which time it will be worthless. No bonus depreciation will be taken. The project is estimated to generate $1,389,000 earnings before interest and taxes (EBIT). The tax rate is 24 percent. What is the annual operating cash flow for this project?

Reference no: EM132999155

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