What is the OCF for the project? Niro Corp. is considering a new four-yearexpansion project that requires an initial fixedasset investment of $3.2 million. The fixed assetwill be depreciated straight-line to zero over itsfour-year tax life, after which time it will beworthless. The project is estimated to generate$2,450,000 in annual sales, with costs of$620,000.If the tax rate is 30 percent, what is the OCF forthe project?

Answer: OCF=$1,521,000 per year

Answered: Niro Corp. is considering a new…

Financial Management: Theory & Practice

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ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter11: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 8P: The Rodriguez Company is considering an average-risk investment in a mineral water spring project...

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