Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,213,393. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $2,122,927 in annual sales, with costs of $1,735,170. If the tax rate is 0.24 , what is the OCF for this project?
Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,213,393. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will be worthless. The project is estimated to generate $2,122,927 in annual sales, with costs of $1,735,170. If the tax rate is 0.24 , 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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Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,213,393. The fixed asset will be
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