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Summer Tyme, Inc., is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.994 million. The fixed asset will be
Summer Tyme, Inc., is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.994 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 $5,328,000 in annual sales, with costs of $2,131,200. Required: If the tax rate is 34 percent, what is the OCF for this project?
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