Determine what is the ocf for this project

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Reference no: EM131999197

Summer Tyme, Inc., is considering a new 2-year expansion project that requires an initial fixed asset investment of $4.266 million. The fixed asset will be depreciated straight-line to zero over its 2-year tax life, after which time it will be worthless.

The project is estimated to generate $3,792,000 in annual sales, with costs of $1,516,800. Required: If the tax rate is 31 percent, what is the OCF for this project?

Reference no: EM131999197

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