Quad Enterprises is considering a new 5-year expansion project that requires an initial fixed asset investment of $3.51 million. The fixed asset will be depreciated straight-line to zero over its 5-year tax life, after which time it will be worthless. The project is estimated to generate $3,120,000 in annual sales, with costs of $1,248,000.

If the tax rate is 22 percent, what is the OCF for this project?

Multiple Choice

• $1,872,000

• $1,695,330

• $912,600

• $1,614,600

• $1,533,870