Requires initial fixed asset investment

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Summer Tyme, Inc., is considering a new 5-year expansion project that requires an initial fixed asset investment of $4.050 million. The fixed asset will be depreciated straight-line to zero over its 5-year tax life, after which time it will be worthless. The project is estimated to generate $3,600,000 in annual sales, with costs of $1,440,000. Required: If the tax rate is 32 percent, what is the OCF for this project?

Reference no: EM131356988

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