Considering new five-year expansion project

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Reference no: EM131825068

NFL, Inc., is considering a new five-year expansion project that requires an initial fixed asset investment of $2 million. The fixed asset will be depreciated straight-line to zero over its five-year tax life, after which time it will be worthless. The project is estimated to generate $1, 500,000 in annual sales, with costs of $600,000 and interest expense of $200,000. If the tax rate is 35 percent, what is the OCF for this project?

Reference no: EM131825068

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