Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $5.994 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 $5,328,000 in annual sales, with costs of $2,131,200. If the tax rate is 22 percent, what is the OCF for this project? Multiple Choice $3,196,800 $1,324,674 $2,964,333 O $2,823,174 $2,682,015
Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $5.994 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 $5,328,000 in annual sales, with costs of $2,131,200. If the tax rate is 22 percent, what is the OCF for this project? Multiple Choice $3,196,800 $1,324,674 $2,964,333 O $2,823,174 $2,682,015
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
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Transcribed Image Text:Quad Enterprises is considering a new 4-year expansion project that requires an initial
fixed asset investment of $5.994 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 $5,328,000 in annual sales, with costs of $2,131,200.
If the tax rate is 22 percent, what is the OCF for this project?
Multiple Choice
$3,196,800
$1,324,674
O
$2,964,333
$2,823,174
$2,682,015
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