Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.674 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 $1,488,000 in annual sales, with costs of $595,200.

If the tax rate is 23 percent, what is the OCF for this project?

Multiple Choice

• $775,006

• $257,796

• $892,800

• $815,796

• $856,586