Question: Chase Corp. is evaluating a project that would require an initial investment of $870,000 and is expected to be in operation for four years. MACRS
Chase Corp. is evaluating a project that would require an initial investment of $870,000 and is expected to be in operation for four years. MACRS depreciation would be used with a three-year schedule where the depreciation rates in years 1, 2, 3, and 4 are 33.33%, 44.44%, 14.82%, and 7.41%, respectively. For each year of the project, Chase expects revenue to be $520,000 and annual costs to be $180,000. The tax rate is 30 percent. What is the operating cash flow (OCF) associated with the project expected to be in Year 1?
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