Summer tyme inc is considering a new 3-year expansion, Ask an Expert

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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $4.428 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $3,936,000 in annual sales, with costs of $1,574,400.

Required:

If the tax rate is 32 percent, what is the OCF for this project?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92873576

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