Summer Tyme, Inc., is considering a new 6-year expansion project that requires an initial fixed asset investment of $6.264 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,568,000 in annual sales, with costs of $2,227,200.

Required:

If the tax rate is 31 percent, what is the OCF for this project?

rev: 09_18_2012

$2,760,232

$3,340,800

$2,628,792

$2,497,352

$1,584,792