Summer Tyme, Inc., is considering a new 4-year expansion project that requires an initial fixed asset investment of $2.268 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $2,016,000 in annual sales, with costs of $806,400.

Required:

If the tax rate is 34 percent, what is the OCF for this project?

$941,560

$1,040,672

$991,116

$424,116

$1,209,600