Problem:
Calculating Project OCF. Keene, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $1.8 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,920,000 in annual sales, with costs of $985,000. If the tax rate is 35 percent, what is the OCF for this project?