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Summer Tyme, Inc. is considering a new 5-year expansion project that requires an initial fixed asset investment of $2.430 million. The fixed asset will be
Summer Tyme, Inc. is considering a new 5-year expansion project that requires an initial fixed asset investment of $2.430 million. The fixed asset will be depreclated straight-line to zero over its 5 -year tax life, after which time it will be worthless. The project is estimated to generate $2,160,000 in annual sales, with costs of $864,000. Required: If the tax rate is 35 percent, what is the OCF for this project? Multiple Choice $1,063,125 $961,875 $1,296,000 $1,012,500 $526.500
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