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Keene, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $150,000. The fixed asset will be depreciated straight
Keene, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $150,000. 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 expected to generate $90,000 annual sales with costs of 35% of the sales. Assume the tax rate is 34%. What is the projects OCF?
a. | $49,230 | |
b. | $58,580 | |
c. | $55,610 | |
d. | $40,150 |
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