Summer Tyme, Inc., is considering a new 6-year expansion project that requires an initial fixed asset investment of $2.862 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $2,544,000 in annual sales, with costs of $1,017,600.
Required:
If the tax rate is 31 percent, what is the OCF for this project?
rev: 09_18_2012
$1,201,086
$1,526,400
$724,086
$1,141,032
$1,261,140