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Quad Enterprises is considering a new 3 year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be
Quad Enterprises is considering a new 3 year expansion project that requires an initial fixed asset investment of $2.9 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 $2,190,000 in annual sales, with costs of $815,000. If the tax rate is 21%, what is the Operating Cash Flow (OCF) for this project?
Given Data | |
Asset investment | $2,900,000 |
Estimated annual sales | $2,190,000 |
Costs | $815,000 |
Tax rate | 21.0% |
Project and Asset Life | 3 |
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