Question

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $760,833. The fixed asset will be depreciated straight-line to 28,916 over its 3-year tax life, after which time it will have a market value of $139,909. The project requires an initial investment in net working capital of $47,049. The project is estimated to generate $168,205 in annual sales, with costs of $83,134. The tax rate is 0.22 and the required return on the project is 0.11. What is the operating cash flow in years 1 through 3? (Make sure you enter the number with the appropriate +/- sign)

Answer 1