Esfandairi Enterprises is considering a new three-year expansion project that requires aninitial fixed asset investment of $2.31 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 isestimated to generate $1,657,000 in annual sales, with costs of $633,000. If the tax rateis 25 percent, what is the OCF for this project? (Do not round intermediate calculationsand enter your answer in dollars, not millions of dollars, rounded to the nearest wholenumber, e.g., 1,234,567.)OCF

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EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter9: Capital Budgeting And Cash Flow Analysis

Section: Chapter Questions

Problem 6P

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