Quad Enterprises is considering a new 3-year expansion project that requires an initialfixed asset Investment of $1.512 million. The fixed asset will be depreciated straight-lineto zero over its 3-year tax life, after which time it will be worthless. The project isestimated to generate $1,344,000 in annual sales, with costs of $537,600.If the tax rate is 22 percent, what is the OCF for this project?Multiple Choice$806,400O $739,872O $235,872$702,878$776,866

Operating cash flows are sum of profit after tax and non cash expenses like depreciation.

Answered: Quad Enterprises is considering a new…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 13P

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