Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of

Question:

Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $2,150,000 in annual sales, with costs of $1,140,000. If the tax rate is 35 percent, what is the OCF for this project?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Essentials Of Corporate Finance

ISBN: 9780073382463

7th Edition

Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan

Question Posted: