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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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