Winter Tyme, Inc., is considering building a plant to produce snow tires. The project would...
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Winter Tyme, Inc., is considering building a plant to produce snow tires. The project would last 5 years and requires an initial fixed asset investment of $1.404 million. The fixed asset will be depreciated straight-line to zero over its 5-year tax life, after which time it will be worthless. Winter Tyme paid $75,000 for a market analysis which indicates the project will generate $1,248,000 in annual sales, with costs of $499,200. Required: If the tax rate is 34 percent, what is the OCF for this project? Multiple Choice O $748,800 $308,880 $589,680 $619,164 $560.196
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