Expansion project that requires initial fixed asset

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Reference no: EM131884014

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.644 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $4,128,000 in annual sales, with costs of $1,651,200. If the tax rate is 33%, what is the annual operating cash flow (OCF) for this project?

Reference no: EM131884014

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