Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $4
Posted: Tue Nov 16, 2021 8:35 am
Hubrey Home Inc. is considering a new three-year expansion
project that requires an initial fixed asset investment of $4.7
million. The fixed asset falls into Class 10 for tax purposes (CCA
rate of 30% per year), and at the end of the three years can be
sold for a salvage value equal to its UCC. The project is estimated
to generate $2,730,000 in annual sales, with costs of $864,000. If
the tax rate is 35%, what is the OCF for each year of this
project? (Enter the answers in dollars. Do not round
your intermediate calculations. Round the final answers to 2
decimal places. Omit $ sign in your response.)
project that requires an initial fixed asset investment of $4.7
million. The fixed asset falls into Class 10 for tax purposes (CCA
rate of 30% per year), and at the end of the three years can be
sold for a salvage value equal to its UCC. The project is estimated
to generate $2,730,000 in annual sales, with costs of $864,000. If
the tax rate is 35%, what is the OCF for each year of this
project? (Enter the answers in dollars. Do not round
your intermediate calculations. Round the final answers to 2
decimal places. Omit $ sign in your response.)