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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initia fixed asset investment of $6.426 million. The fixed asset will be
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initia fixed asset investment of $6.426 million. The fixed asset will be depreciated straight-line to zero over its 3-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. Required: If the tax rate is 32 percent, what is the OCF for this project? Multiple Choice $2,865,139 $3,427,200
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