Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $39.00 per unit. The cost to produce each unit is expected to be about 40% of the sales price. The new product will have an additional $460,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $2,900,000 and will be depreciated over eight years (straight line). The company tax rate is 40%. 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? What is the annual operating cash flow for the alarm systems? (Round to the nearest dollar.)
Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per year at $39.00 per unit. The cost to produce each unit is expected to be about 40% of the sales price. The new product will have an additional $460,000 of fixed costs each year, and the manufacturing equipment will have an initial cost of $2,900,000 and will be depreciated over eight years (straight line). The company tax rate is 40%. 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? What is the annual operating cash flow for the alarm systems? (Round to the nearest dollar.)
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
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Transcribed Image Text:Operating cash flow. Huffman Systems has forecasted sales for its new home alarm systems to be 65,000 units per
year at $39.00 per unit. The cost to produce each unit is expected to be about 40% of the sales price. The new
product will have an additional $460,000 of fixed costs each year, and the manufacturing equipment will have an initial
cost of $2,900,000 and will be depreciated over eight years (straight line). The company tax rate is 40%. 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?
What is the annual operating cash flow for the alarm systems?
(Round to the nearest dollar.)
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