Question
TI, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $692,515. The fixed asset will be depreciated straight-line
TI, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $692,515. The fixed asset will be depreciated straight-line to 68,490 over its 3-year tax life, after which time it will have a market value of $95,298. The project requires an initial investment in net working capital of $47,859. The project is estimated to generate $248,272 in annual sales, with costs of $133,439. The tax rate is 0.34 and the required return on the project is 0.15. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)
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