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A company is considering a new four-year expansion project that requires an initial fixed asset investment of $1.5 million. The fixed asset will be depreciated
A company is considering a new four-year expansion project that requires an initial fixed asset investment of $1.5 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 expected to generate $2,500,000 in sales, with costs of $950,000. The company is financed with all equity. If the tax rate is 30%, what is the operating cash flow for this project? O $1,050,00 O $1,235,000 O $315,000 O $500,000
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