Question
Shelton, Co. is evaluating making an up-front fixed asset investment of $2,350,000 for an expansion project that will last three years. This asset will be
Shelton, Co. is evaluating making an up-front fixed asset investment of $2,350,000 for an expansion project that will last three years. This asset will be depreciated using the straight-line method. It will be depreciated to zero over the life of the project and has no salvage value when the project is over. The project is estimated to generate $2,470,000 in annual sales. The annual costs are estimated to be $1,490,000. The tax rate is 24 percent. Calculate the operating cash flow for this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
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