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Summer Tyme, Inc., is considering a new 5-year expansion project that requires an initial fixed asset investment of $4.158 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 $4.158 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 $3,696,000 in annual sales, with costs of $1,478,400. Required: If the tax rate is 34 percent, what is the OCF for this project? rev: 09_18_2012 $1,833,678 $1,746,360 $914,760 $1,659,042 $2,217,600
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