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Summer Tyme, Inc., is considering a new 5-year expansion project that requires an initial fixed asset investment of $4.536 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 $4.536 million. The fixed asset will be depreciated straight-line to zero over its 5-year tax life, after which time it will be worthless. The project is estimated to generate $4,032,000 in annual sales, with costs of $1,612,800. Required: If the tax rate is 32 percent, what is the OCF for this project?
Options:
$1,935,360
$2,032,128
$2,419,200
$1,838,592
$1,028,160
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