Phone Home, Inc. is considering a new 6-year expansion project that requires an
ID: 2674881 • Letter: P
Question
Phone Home, Inc. is considering a new 6-year expansion project that requires an initial fixed asset investment of $5.994 million. The fixed asset will be depreciated straight-line to zero over its 6-year tax life, after which time it will be worthless. The project is estimated to generate $5,328,000 in annual sales, with costs of $2,131,200. The tax rate is 24 percent. What is the operating cash flow for this project?Please show work
Answer
$1,894,318
$2,211,407
$2,515,482
$2,669,328
$2,845,152
Explanation / Answer
$2,669,328