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Acme, Inc. produces anvils. The company is considering buying a $63,750 piece of equipment that will increase annual sales from 14,700 units to 17,550 units.
Acme, Inc. produces anvils. The company is considering buying a $63,750 piece of equipment that will increase annual sales from 14,700 units to 17,550 units. The equipment would be depreciated straight-line to zero over the 6-year life of the project. At that point, the equipment will be worthless. The company faces annual fixed costs of $16,200. Anvils cost $52 per unit to produce, and can be sold for $62. If the tax rate is 21 percent, what is the operating cash flow for this project?
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