Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $ 2 4

Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $24,000, and the company expects to sell 1,570 per year. The company currently sells 1,920 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,590 units per year. The old board retails for $22,400. Variable costs are 52 percent of sales, depreciation on the equipment to produce the new board will be $1,455,000 per year, and fixed costs are $3,075,000 per year. If the tax rate is 22 percent, what is the annual OCF for the project?
Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g.,32.
image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managing The Audit Function A Corporate Audit Department Procedures Guide

Authors: Michael P. Cangemi

2nd Edition

0471012556, 978-0471012559

More Books

Students also viewed these Finance questions