Question
In: Finance
Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment...
Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment of $3.834 million. The fixed asset will be depreciated straight-line to zero over its 4-year tax life, after which time it will be worthless. The project is estimated to generate $3,408,000 in annual sales, with costs of $1,363,200. If the tax rate is 22 percent, what is the OCF for this project?
Solutions
Expert Solution
Solution :
The Operating Cash Flow each Year for the project is = $ 1,805,814.00
Th total operating cash flows of the project in 4 Years = $ 1,805,814.00 * 4 = $ 7,223,256.00
Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.
jeff jeffy answered 11 months agoRelated Solutions
Quad Enterprises is considering a new 4-year expansion project that requires an initial fixed asset investment...
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The fixed asset will be depreciated straight-line to zero over its
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$825,600.
If the tax rate is 25 percent, what is the OCF for this
project?
Multiple Choice
$493,425
$1,020,229
$1,127,621
$1,238,400
$1,073,925
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