FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Quad Enterprises is considering a new three-year expansion project that
requires an initial fixed asset investment of $2.32 million. 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 $1,660,000 in annual
sales, with costs of $635,000. If the tax rate is 21 percent, what is the OCF for
this project? (Do not round intermediate calculations and enter your answer
in dollars, not millions of dollars, e.g.., 1,234,567.)
ОCF
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Transcribed Image Text:Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.32 million. 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 $1,660,000 in annual sales, with costs of $635,000. If the tax rate is 21 percent, what is the OCF for this project? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g.., 1,234,567.) ОCF
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