Stoli Inc is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.454 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $4,848,000 in annual sales, with costs of $1,939,200. If the tax rate is 24 percent, what is the OCF for this project?
Stoli Inc is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.454 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $4,848,000 in annual sales, with costs of $1,939,200. If the tax rate is 24 percent, what is the OCF for this project?
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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Stoli Inc is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.454 million. The fixed asset will be
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