3 . Coco's Cocoa Palace is considering a new three - year expansion project that requires an initial fixed investment of $3 9 million . The fixed asset will be depreciated straight - line to zero over its three year tax life , after which it will be worthless . The project is estimated to generate $2 650,000 in annual sales , with costs of $840 ,000 a . If the tax rate is 35% , what is the OCF for this project ? b . If the required return on the project is 12% , what is the project's NPV