preciated straight-line to zero over its three-year tax life, after which time be worthless. The project is estimated to generate $1,651,000 in annual with costs of $629,000. If the tax rate is 23 percent, what is the OCF for roject? (Do not round intermediate calculations and enter your answer
preciated straight-line to zero over its three-year tax life, after which time be worthless. The project is estimated to generate $1,651,000 in annual with costs of $629,000. If the tax rate is 23 percent, what is the OCF for roject? (Do not round intermediate calculations and enter your answer
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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
Transcribed Image Text:Quad Enterprises is considering a new three-year expansion project that
requires an initial fixed asset investment of $2.29 million. The fixed asset will
be depreciated straight-line to zero over its three-year tax life, after which time
it will be worthless. The project is estimated to generate $1,651,000 in annual
sales, with costs of $629,000. If the tax rate is 23 percent, what is the OCF for
this project? (Do not round intermediate calculations and enter your answer
in dollars, not millions of dollars, e.g.., 1,234,567.)
OCF
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