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?

Answer rating: 100% (QA)

To calculate the operating cash flow each year we need to consider the following components Revenue ... View the full answer