Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.726 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 $3,312,000 in annual sales, with costs of $1,324,800.
Required:
If the tax rate is 31 percent, what is the OCF for this project?