Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $23,600, and the company expects to sell 1,530 per year. The company currently sells 1,880 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,550 units per year. The old board retails for $22,000. Variable costs are 54 percent of sales, depreciation on the equipment to produce the new board will be $1,695,000 per year, and fixed costs are $2,975,000 per year. If the tax rate is 23 percent, what is the annual OCF for the project? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. OCF

Shue Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $23,600, and the company expects to sell 1,530 per year. The company currently sells 1,880 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,550 units per year. The old board retails for $22,000. Variable costs are 54 percent of sales, depreciation on the equipment to produce the new board will be $1,695,000 per year, and fixed costs are $2,975,000 per year. If the tax rate is 23 percent, what is the annual OCF for the project? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. OCF

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

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