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10 Quad Enterprises is considering a new 5-year expansion project that requires an initial fixed asset investment of $4.806 m

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Answer #1

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

=(4,806,000/5)=$961200

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

=(4,272,000-1,708,800)(1-0.22)+(0.22*961200)

=$2210760

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