Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $2.322 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 $2,064,000 in annual sales, with costs of $825,600.

If the tax rate is 25 percent, what is the OCF for this project?

Multiple Choice

• $493,425

• $1,020,229

• $1,127,621

• $1,238,400

• $1,073,925