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NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system: annual sales of 45,000 units at $16 a
NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system: annual sales of 45,000 units at $16 a unit, production costs at 38% of sales price, annual fixed costs for production at $210,000. The company tax rate is 35%. 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 $1,320,000 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 11%. What is the annual operating cash flow of the new GPS system? $L (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? $L (Round to the nearest dollar) Should Grady Precision Measurement Tools add the GPS system to its set of products? (Select the best response.) 0 A. No, because the NPV is negative which means the projected annual rate of return on the project is less than the 0 B. Yes, because the project will generate enough wealth to give investors an adequate yield. cost of capital
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