Calculate the cash flow in each of the 5 years of this project for a new...
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Calculate the cash flow in each of the 5 years of this project for a new product given the following information • $15/ unit sales price • $/2unit cost of raw materials • $8/unit cost of direct labor • $1500/month rent • $1000/year insurance • $50,000 supervisor salary (cost to the company) • 20,000 units/year sales volume increasing at 5%each year • Initial cost for the machinery of $150,000, depreciated using MACRS 7year recovery period • The machinery is sold in the 5th year for $20,000. • 28% tax rate Calculate the cash flow in each of the 5 years of this project for a new product given the following information • $15/ unit sales price • $/2unit cost of raw materials • $8/unit cost of direct labor • $1500/month rent • $1000/year insurance • $50,000 supervisor salary (cost to the company) • 20,000 units/year sales volume increasing at 5%each year • Initial cost for the machinery of $150,000, depreciated using MACRS 7year recovery period • The machinery is sold in the 5th year for $20,000. • 28% tax rate
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ANSWER The cash flow calculations for each of the 5 years of the project Year 1 Sales 20000 units ... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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