Question 10
1 pts
10. Calculating Project OCF
H. Cochran, Inc., is considering a new three-year expansion project that requires an
intial fixed asset investment of $1,950,000. 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 $2,145,000 in annual sales, with costs of
$1,205,000. If the tax rate is 21 percent, what is the OCF for this project?
Question 11
11. Calculating Project NPV
1 pts
In the previous problem, suppose the required return on the project is 14 percent.
What is the project's NPV?