Depreciated straight-line to zero over its four-year life

Assignment Help Financial Management

Reference no: EM131360972

Miller Lite, Inc. is considering a new four-year expansion project that requires an initial fixed asset investment of $3.6 million. The fixed asset will be depreciated straight-line to zero over its four-year life, after which time it will be worthless. The project is estimated to generate $3.9 million in annual sales, with costs of $2.6 million. If the tax rate is 35 percent, what is the OCF for this project?

a. 1,160,000

b. 997,720

c. 684,280

d. 845,000,000

e. 911,760

Reference no: EM131360972

Questions Cloud

Find the free trade equilibrium quantity of exports : Find the free trade equilibrium quantity of exports. What is the producer surplus in this equilibrium? Country H elects to offer a 25% subsidy to exports of X. What is the equilibrium quantity of exports with this subsidy?

Discuss your experience with literature : Discuss your experience with literature. Are you an avid reader? What literature courses have you previously taken? Do you enjoy literature, why or why not

Identify an emerging technology in your field of choice : Identify social media strategies that the university can use to achieve its objectives: Provide a description on how each strategy can be utilized by the university. Illustrate advantages and disadvantages of each strategy.

Studying the lead time : Ecommerce.com a large internet retailer is studying the lead time (elapsed time between when an order is placed and when it is filled) for a sample of recent orders. The lead times are reported in days

Depreciated straight-line to zero over its four-year life : Miller Lite, Inc. is considering a new four-year expansion project that requires an initial fixed asset investment of $3.6 million. The fixed asset will be depreciated straight-line to zero over its four-year life, after which time it will be worthle..

Maintain or maximize each identified strength : Discuss those areas that are strengths (higher scores) and those areas that need further development (lower scores). Identify two strategies you can use to maintain or maximize each identified strength

Issued perpetual preferred stock : The First Bank of Flagstaff has issued perpetual preferred stock with a $100 par value. The bank pays a quarterly dividend of $1.65 on this stock. What is the current price of this preferred stock given a required rate of return of 14.25 percent?

Definition having the characteristic of flexibility : What kinds of actions must an organization take for it to fit your definition having the characteristic of flexibility? What exactly must be known by organizations to keep customers coming back for example?

How creative thinking styles can potentially create conflict : Consider how different creative thinking styles can potentially create conflict among teams. You can review the five personality traits that were covered in a previous course by referring to the Digman article in the Optional Resources this week.

User Account

All Pages