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A company sells Gizmos to consumers at a price of $92 per unit. The costs to produce Gizmos is $23 per unit. The company will
A company sells Gizmos to consumers at a price of $92 per unit. The costs to produce Gizmos is $23 per unit. The company will sell 12,000 Gizmos to consumers each year. The fixed costs incurred each year will be $170,000. There is an initial investment to produce the goods of $2,700,000 which will be depreciated straight line over 12 year life of the investment to a salvage value of $0. The opportunity cost of capital is 14% and the tax rate is 37%.
What is operating cash flow each year?
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