Quad Enterprises is considering a new 6-year expansion project that requires an initial fixed asset investment of $6.426 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,712,000 in annual sales, with costs of $2,284,800.

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

Multiple Choice

• $2,885,274

• $3,427,200

• $2,741,010

• $1,814,274

• $3,029,538