What is the ocf


Problem: A company is considering a new 2 year expansion project which will require an intial fixed asset investment of $6.21 million, the fixed asset will be depreciated straight line to zero over its 2 year tax life after that it will be worthless, this project is estimated to generate $5,520,000 in annual sales, have costs of $2,208,000 and the tax rate is 35% then what is the OCF?

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Accounting Basics: What is the ocf
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