Question: XYZ Corp. is considering introducing a new 90 flat screen television/monitor for the consumer market. - The company will have to purchase a now machine
XYZ Corp. is considering introducing a new 90 flat screen television/monitor for the consumer market. - The company will have to purchase a now machine to produce the sereens. The machine's after-tax price would be $1,000,000 and was fully depreciated at the time of purchase. - Last year, a market researeh study for the new product cost $1,500,000. - The company's interest expense each year will be $350,000. - Because the new produet line is similar to another of XYZ's existing products, the new sereens are expected to reduce the sales of the company's current large sereen TV's by $650,000 per year. - The sereen is expected to generate sales revenue of $5,000,000 per year. - Each year the operating costs (not including depreciation) are expected to be 2,000,000. - The company's tax rate is 25%. What is the annual expected incremental \pperating cash flow? $1,375,000$2,378,000$2,250,000$1,987,500$1,762,500
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