Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.616 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 $4,992,000 in annual sales, with costs of $1,996,800.

If the tax rate is 24 percent, what is the OCF for this project?

Multiple Choice

• $2,725,632

• $853,632

• $2,995,200

• $2,589,350

• $2,861,914