Question: Miglietti Restaurants is looking at a project with the following
Miglietti Restaurants is looking at a project with the following forecasted sales: first-year sales quantity of 31,000 with an annual growth rate of 3.5% over the next ten years. The sales price per unit is $42.00 and will grow at 2.25% per year. The production costs are expected to be 55% of the current year’s sales price. The manufacturing equipment to aid this project will have a total cost (including installation) of $2,400,000. It will be depreciated using MACRS and has a seven-year MACRS life classification. Fixed costs are $335,000 per year. Miglietti Restaurants has a tax rate of 30%.What is the operating cash flow for this project over these ten years?
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