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TEM Corp is considering an expansion project that requires an initial fixed asset investment of $ 4 , 0 0 0 , 0 0 0

TEM Corp is considering an expansion project that requires an initial fixed asset investment of $4,000,000. The fixed assets will be depreciated over 10 years using straight-line (not MACRS) with no residual value. The project will generate annual sales of $4,500,000, cash costs of $3,400,000(costs DO NOT include depreciation expense) and the tax rate is 25%.
What is the annual operating cash flow of the project?

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