Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be...

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Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $41.00 per unit. The cost to produce each unit is expected to be about 39% of the sales price. The new product will have an additional $450,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $2,800,000 and will be depreciated over eight years (straight line). The company tax rate is 38%. What is the annual operating cash flow for the alarm systems if the projected sales and price per unit are constant over the next eight years? Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $41.00 per unit. The cost to produce each unit is expected to be about 39% of the sales price. The new product will have an additional $450,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $2,800,000 and will be depreciated over eight years (straight line). The company tax rate is 38%. What is the annual operating cash flow for the alarm systems if the projected sales and price per unit are constant over the next eight years?

Answer rating: 100% (QA)

Calculation of operating cashflows Workings Sales 65000 units41 2665000 Less Cost 26650003... View the full answer