Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A company will sell Thingamajgs to consumers at a price of $120 por unit. The variable cost to produce Thingamajigs is $48 per unit. The

image text in transcribed
A company will sell Thingamajgs to consumers at a price of $120 por unit. The variable cost to produce Thingamajigs is $48 per unit. The company expects to sell 20,000 Thingamajigs to consumers each year. The fixed costs incurred each year will be $110,000. There is an initial investment to produce the goods of $3,400,000 which will be depreciated straight line over the 18 year life of the investment to a salvage value of $0. The opportunity cost of capital is 14% and the tax rate is 39%. What is operating cash flow each year? 884966.6 Correct responset 884,966.67+1 Click "Verity to proceed to the next part of the question Using the an annual operating cash flow of $884,966,67, what is the net present value of this investment? Number Should the company accept or reject this project? Accept Reject

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Everything Guide To Day Trading

Authors: David Borman

1st Edition

1440506213, 978-1440506215

More Books

Students also viewed these Finance questions

Question

How will this help you to achieve your goal?

Answered: 1 week ago