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What is the ocf

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Reference no: EM132557214

J. Child's Gourmet Pie Shop has the following investment opportunity:

  • Pie machinery at t=0 costs $1,500.
  • The cost of making pies is $350 at t=1, t=2, and t=3.
  • The pie machinery is depreciated straight line depreciation to zero over 3 years.
  • The market value of the pie machinery after three years is zero.
  • Estimated annual sales are $950 at t=1, t=2, and t=3.
  • The required return is 13%.
  • The tax rate is 25%.
  • Assume no working capital requirements.

What is the OCF (Operating Cash Flow) at t=1?

Reference no: EM132557214

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