A company sells Widgets to consumers at a price of $113 per unit. The costs to produce
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Question:
A company sells Widgets to consumers at a price of $113 per unit. The costs to produce Widgets is $23 per unit. The company will sell 10,000 Widgets to consumers each year. The fixed costs incurred each year will be $160,000. There is an initial investment to produce the goods of $3,100,000 which will be depreciated straight line over 14 year life of the investment to a salvage value of $0. The opportunity cost of capital is 10% and the tax rate is 38%.
What is operating cash flow each year?
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