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Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $41.00 per unit.
Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $41.00 per unit. The cost to produce each unit is expected to be about 41% of the sales price. The new product will have an additional $480,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $2,800,000 and will be depreciated over eight years (straight line). The company tax rate is 40%. What is the annual operating cash flow for the alarm systems if the projected sales and price per unit are constant over the next eight years?
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