Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,660,000 in annual sales, with costs of $843,000. If the tax rate is 35%, what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) OCF 1 OCF 2 OCF 3
Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage value equal to its UCC. The project is estimated to generate $2,660,000 in annual sales, with costs of $843,000. If the tax rate is 35%, what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your intermediate calculations. Round the final answers to 2 decimal places. Omit $ sign in your response.) OCF 1 OCF 2 OCF 3
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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14) could you help i am kind of confused
Transcribed Image Text:Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4 million. The
fixed asset falls into Class 10 for tax purposes (CCA rate of 30% per year), and at the end of the three years can be sold for a salvage
value equal to its UCC. The project is estimated to generate $2,660,000 in annual sales, with costs of $843,000. If the tax rate is 35%,
what is the OCF for each year of this project? (Enter the answers in dollars. Do not round your intermediate calculations. Round the
final answers to 2 decimal places. Omit $ sign in your response.)
OCF1
OCF 2
OCF 3
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