A company will sell Gizmos to consumers at a price of $91 per unit. The...
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A company will sell Gizmos to consumers at a price of $91 per unit. The variable cost to produce Gizmos is $35 per unit. The company expects to sell 15,000 Gizmos to consumers each year. The fixed costs incurred each year will be $180,000. There is an initial investment to produce the goods of $2,300,000 which will be depreciated straight line over the 5 year life of the investment to a salvage value of $0. The opportunity cost of capital is 14% and the tax rate is 29%.
What is operating cash flow each year?
What is the Net Present Value?
Find the net present value break-even level of units sold?
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