Q# 7 NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new
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Q# 7 NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPSsystem: annual sales of 45,000 units at $17 aunit, production costs at 39% of salesprice, annual fixed costs for production at $200,000. The company tax rate is 40%. What is the annual operating cash flow of the new GPSsystem? Should Grady Precision Measurement Tools add the GPS system to its set ofproducts? The initial investment is $1,320,000 for manufacturingequipment, which will be depreciated over six years(straight line) and will be sold at the end of five years for $380,000. The cost of capital is 11%.
What is the annual operating cash flow of the new GPSsystem?
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