Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $6.264 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $5,568,000 in annual sales, with costs of $2,227,200.

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

Multiple Choice

• $2,785,966

• $3,340,800

• $3,079,226

• $1,366,596

• $2,932,596