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Cochrane. Inc, is considering a new three-year expansion project that requires an initial fixed asset investment of $2.1 mill
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Answer #1

Annual depreciation=(Cost-Salvage value)/Useful Life

=(2,100,000/3)=$700,000/year

OCF=(Sales-Costs)(1-tax rate)+Tax savings on Annual depreciation

=(2,150,000-1,311,236)(1-0.35)+(0.35*700,000)

=790196.60

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