A company sells Tidbits to consumers at a price of $120 per unit. The costs to produce Tidbits is $47 per unit. The company will sell 14,000 Tidbits to consumers each year. The fixed costs incurred each year will be $210,000. There is an initial investment to produce the goods of $3,300,000 which will be depreciated straight line over 9 year life of the investment to a salvage value of $0. The opportunity cost of capital is 9% and the tax rate is 36%. What is operating cash flow each year?
A company sells Tidbits to consumers at a price of $120 per unit. The costs to produce Tidbits is $47 per unit. The company will sell 14,000 Tidbits to consumers each year. The fixed costs incurred each year will be $210,000. There is an initial investment to produce the goods of $3,300,000 which will be depreciated straight line over 9 year life of the investment to a salvage value of $0. The opportunity cost of capital is 9% and the tax rate is 36%. What is operating cash flow each year?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Please help me i will surely like please make sure its correct
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education