Company ABC is considering a new three-year expansion project that requires an initial fixed asset investment of $2.79 million. The fixed asset will be depreciated straight-line to zero over its three-year life, after which it will be worthless. The project is estimated to generate $2,110,000 in annual sales, with annual costs of $805,000. The tax rate is 35 percent and the required return is 12 percent. What is the operating cash flow (OCF) in year 1?

A.

$6,330,000

B.

$3,915,000

C.

$29,149

D.

$1,173,750