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Quad Enterprises is considering a new 5-year expansion project that requires an initial fixed asset investment of $3.078 million. The fixed asset will be depreciated
Quad Enterprises is considering a new 5-year expansion project that requires an initial fixed asset investment of $3.078 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 $2,736,000 in annual sales, with costs of $1,094,400.
If the tax rate is 23 percent, what is the OCF for this project?
a) 1,335,339
b) 1,405,620
c) 790,020
d) 1,475,901
e) 1,641,600
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