Jansen Company, Inc. is contemplating a new 4 – year expansion project that requires an initial fixed asset investment of $3.6 million and initial working capital investment of $300,000. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it is expected to be sold for $200,000 cash. The project is estimated to generate $3,050,000 in annual sales, with costs of $1,992,000. If the tax rate is 35%, what is the Operating Cash Flow (OCF) for this project for each of the 4 years?

Answer rating: 100% (QA)

To calculate the Operating Cash Flow OCF for each of the 4 years we need to follow these steps 1 Cal... View the full answer