Requires an initial fixed asset investment

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Reference no: EM131317524

Summer Tyme, Inc., is considering a new 6-year expansion project that requires an initial fixed asset investment of $2.862 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $2,544,000 in annual sales, with costs of $1,017,600.

Required:

If the tax rate is 31 percent, what is the OCF for this project?

rev: 09_18_2012

$1,201,086

$1,526,400

$724,086

$1,141,032

$1,261,140

Reference no: EM131317524

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