Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,213,393. 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 $2,122,927 in annual sales, with costs of $1,735,170. If the tax rate is 0.24 , what is the OCF for this project?

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $2,213,393. 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 $2,122,927 in annual sales, with costs of $1,735,170. If the tax rate is 0.24 , what is the OCF for this project?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 2PB: Markoff Products is considering two competing projects, but only one will be selected. Project A...

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