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Roadrunner Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $3,000,000 The fixed asset will be depreciated straight-line
Roadrunner Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $3,000,000 The fixed asset will be depreciated straight-line to zero over its 4- year tax life, after which it will be worthless. The project is estimated to generate $3,250,000 in sales and $2,250,000 in total costs. The tax rate is 40%. Investments of this risk have a cost of capital of 10%. Calculate the Operating Cash Flow (OCF). Select one: a. $850,000 to $950,000 b. More than $1,050,000 c. $750,000 to $850,000 d. Less than $750,000 e. $950,000 to $1,050,000
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