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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.832 million. The fixed asset will be
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $5.832 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 $5,184,000 in annual sales, with costs of $2,073,600. |
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If the tax rate is 33 percent, what is the OCF for this project? A. $2,725,488 B. $2,589,214 C. $781,488 D. $2,861,762 E. $3,110,400 |
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