#13. Calculating Project OCF Hubrey Home Inc. is considering a new three-year expansion project that...
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#13. Calculating Project OCF Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $3.9 million. The fixed asset falls into Class 10 for tax purposes (CCA rate of 30 percent 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 $2,650,000 in annual sales, with costs of $840,000. If the tax rate is 35 percent, what is the OCF for each year of this project?
A) If the tax rate is 35 percent and the required return is 12%, what is the PVCCATS?
B) In the previous problem, supposed the required return on the project is 12 percent. What is the project's NPV?
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