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NPV.Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS? system:...

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NPV.Grady Precision Measurement Tools has forecastedthe following sales and costs for a new GPS? system: annual salesof 46,000 units at ?$16 a? unit, production costs at 37?% of sales?price, annual fixed costs for production at $ 210,000. The companytax rate is 35?%. What is the annual operating cash flow of the newGPS?system? Should Grady Precision Measurement Tools add the GPSsystem to its set of? products? The initial investment is?$1,440,000 for manufacturing? equipment, which will be depreciatedover six years? (straight line) and will be sold at the end of fiveyears for $ 380,000. The cost of capital is 10?%.

What is the annual operating cash flow of the new GPS?system?

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3.7 Ratings (315 Votes)
Calculation of the annual operating cash flow of the new GPS system Sales Units 46000 x Selling price per unit 1600 Sales 73600000 Less Variable Production costs 37 27232000 Less Fixed costs of production 21000000 Less Depreciation 24000000 Profit before tax 1368000 Less    See Answer
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NPV.Grady Precision Measurement Tools has forecastedthe following sales and costs for a new GPS? system: annual salesof 46,000 units at ?$16 a? unit, production costs at 37?% of sales?price, annual fixed costs for production at $ 210,000. The companytax rate is 35?%. What is the annual operating cash flow of the newGPS?system? Should Grady Precision Measurement Tools add the GPSsystem to its set of? products? The initial investment is?$1,440,000 for manufacturing? equipment, which will be depreciatedover six years? (straight line) and will be sold at the end of fiveyears for $ 380,000. The cost of capital is 10?%.What is the annual operating cash flow of the new GPS?system?

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