The project is estimated to generate 5328000 in annual

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Phone Home, Inc. is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.876 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 $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 32 percent. What is the annual operating cash flow for this project?

A. $1,894,318

B. $2,211,407

C. $2,487,211

D. $2,663,021

E. $2,848,315

Reference no: EM13479312

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