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A company will sell Thingamabobs to consumers at a price of $110 per unit. The variable cost to produce Thingamabobs is $35 per unit. The
A company will sell Thingamabobs to consumers at a price of $110 per unit. The variable cost to produce Thingamabobs is $35 per unit. The company expects to sell 18,000 Thingamabobs to consumers each year. The fixed costs incurred each year will be $120,000. There is an initial investment to produce the goods of $3,300,000 which will be depreciated straight line over the 10 year life of the investment to a salvage value of $0. The opportunity cost of capital is 13% and the tax rate is 40%. What is operating cash flow each year?
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