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A proposed expansion project is expected to increase sales by $ 7 7 , 0 0 0 and increase cash expenses by $ 3 8

A proposed expansion project is expected to increase sales by $77,000 and increase cash expenses by $38,000. The project will require $56,000 of fixed assets that will be depreciated using straight-line depreciation to a zero book value over the five-year life of the project. The store has a marginal tax rate of 20 percent. What is the operating cash flow of the project using the tax shield approach? Ignore bonus depreciation.

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