Quad Enterprises is considering a new 3-year expansion project that requires an initialfixed asset Investment of $1.512 million. The fixed asset will be depreciated straight-lineto zero over its 3-year tax life, after which time it will be worthless. The project isestimated to generate $1,344,000 in annual sales, with costs of $537,600.If the tax rate is 22 percent, what is the OCF for this project?Multiple Choice$806,400O $739,872O $235,872$702,878$776,866

Operating cash flows are sum of profit after tax and non cash expenses like depreciation.Formulas :Option 2: $739,872

Answered: Quad Enterprises is considering a new…

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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