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P10-9 Calculating Project OCF (LO1] Summer Tyme, Inc., is considering a new 2-year expansion project that requires an initial
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Answer #1

Operating cash flow (OCF) each year = income after tax + depreciation

Depreciation = initial investment / depreciable life = $6,372,000 / 2 = $3,186,000

OCF = $3,328,308

B 2 Initial Investment 3 Initial fixed asset investment $6,372,000 5 OCF 6 Revenues 7 - Costs 8 - Depreciation 9 Income befor

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