Fuzzy Sneakers INC. is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.210 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 estimated to generate $5,520,000 in annual sales, with costs of $2,208,000.

Required:

If the tax rate is 34%, what is the OCF for this project?

Multiple Choice ( please Select the correct answer)

• $3,034,206
• $819,720
• $2,745,234
• $3,312,000
• $2,889,720