Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset investment of $2.37 million. the fixed asset will be

Quad Enterprises is considering a new three year expansion project that requires an initial fixed asset investment of $2.37 million. the fixed asset will be depreciated straightline to zero over its three year tax life, after which time it will be worthless. the project is estimated to generate $1,675,000 in annual sales, with costs of $645,000. if the tax rate is 21 percent, what is OCF for this project
image text in transcribed
Problem 10-9 Calculating Project OCF [LO1] Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.37 million. The fixed asset will be depreciated straight- line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,675,000 in annual sales, with costs of $645,000. If the tax rate is 21 percent, what is the OCF for this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g.. 1,234,567) OCF

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Managerial Finance

Authors: Chad J. Zutter, Scott Smart

16th Edition

0136945880, 978-0136945888

More Books

Students also viewed these Finance questions

Question

What are the principal disadvantages of outsourcing? AppendixLO1

Answered: 1 week ago

Question

What committees does the person serve on?

Answered: 1 week ago

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago