Requires initial fixed asset investment

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Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $3 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,180,000 in annual sales, with costs of $875,000. If the tax rate is 30 percent, what is the OCF for this project?

Reference no: EM132049653

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