Question $10$

$1$ pts

Calculating Project OCF

H$.$ Cochran, Inc., is considering a new three$-$year expansion project that requires an

initial fixed asset investment of $$1,950,000.$ 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 $$2,145,000$ in annual sales, with costs of

$$1,205,000.$ If the tax rate is $21$ percent, what is the OCF for this project?

Question $11$

Calculating Project NPV

In the previous problem, suppose the required return on the project is $14$ percent.

What is the project's NPV$?$