1.Calculating Project OCF: H cochran. Inc is considering a new three year expansion project that that require an initial fixed asset investment of 2.15 million. the fixed asset will be depreciated straight -line to zero over its three-years tax life, after which time it will be worthless. The project is estimated to generate 2.23 million annual sale with cost of 1.25 million. IF the Tax rate if 23 percent, what is the OCF for the project?

2 . Calculating project NPV: in the previous example ( Question 1) suppose the required return on the project is 14 percent. What is the Project's NPV?

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