Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $1.188 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $1,056,000 in annual sales, with costs of $422,400. If the tax rate is 22 percent, what is the OCF for this project?

Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $1.188 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $1,056,000 in annual sales, with costs of $422,400. If the tax rate is 22 percent, what is the OCF for this project?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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