Calculating Project OCF H. Cochran, Inc., is

considering a new three-year expansion project

that requires an initial fixed asset investment of

$2.54million. 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 $2.12 million in annual

sales, with costs of $1.38 million. If the tax rate is

23 percent, what is the OCF for this project?