NPV$.$ Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system: annual sales of $47,000$ units at $$16$ a unit, production costs at

$37\%$ of sales price, annual fixed costs for production at $$190,000.$ The company tax rate is $40\%.$ What is the annual operating cash flow of the new GPS system? Should Grady

Precision Measurement Tools add the GPS system to its set of products? The initial investment is $$1,420,000$ for manufacturing equipment, which will be 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 syatem?

$

$($Round to the nearest dollar.$)$

Should Grady Precision Measurement Tools add the GPS system to its set of products? $($Select the best response.$)$

A$.$ Yes, because the project will generate enough wealth to give investors an adequate yield.

B$.$ No$,$ because the NPV is negative which means the projected annual rate of return on the project is less than the cost of capital.