Question: Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.426 million. The fixed asset will be depreciated

 Quad Enterprises is considering a new 3-year expansion project that requires

Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $6.426 million. 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 $5,712,000 in annual sales, with costs of $2,284,800. If the tax rate is 21 percent, what is the OCF for this project? Multiple Choice $3,315,173 $1,015,308 $3,427,200 $2,999,443 $3,157,308

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!