Calculating Project OCF (LO3)

Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,650,000 in annual sales, with costs of $840,000. If the tax rate is 35%, what is the OCF for each year of this project?

Calculating Project NPV (LO2)

In the previous problem, supposed the required return on the project is 12%. What is the project's NPV?