Question
Grady Precision Measurement Tools has forecasted the following sales and costs for new GPS system annual sales of 46,000 units at $17 a unit, production
Grady Precision Measurement Tools has forecasted the following sales and costs for new GPS system annual sales of 46,000 units at $17 a unit, production costs at 39% of sales price, annual fixed costs for production at $200,000. The company tax rate is 40%. What is the annual operating cash flow of the new GPA system? Should Grady Precision Measurement Tools add the GPS system to its set of products? The initial investment is $1,410,000 and is depreciated over six years (straight line) and will be sold at the end of five years for $380,000. The cost of capital is 12%
What is the annual operating cash flow of the new GPS system? (Round to the nearest dollar.)
What is the after-tax cash flow of the GPS system at disposal? (Round to the nearest dollar.)
What is the NPV of the new GPS system? (Round to the nearest dollar.)
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