Question
ABC, Inc is planning the purchase of new equipment that costs $177,045. The project is expected to last for 7 years. Each year, the new
ABC, Inc is planning the purchase of new equipment that costs $177,045. The project is expected to last for 7 years. Each year, the new project is expected to sell 172 units for $492 per unit. The variable costs are expected to $20 per unit and the fixed costs are expected to be $23,335. The equipment will be depreciated on a straight-line basis over the 7-year life of the project. That is, the depreciation each year will be $177,045/7. Assuming a tax rate of 32%, what is the operating cash flow?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.
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