Solution-Annual ocf for the project

Annual ocf for the project

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Reference no: EM131056724

Rolston Music Company is considering the sale of a new soundboard used in recording studios. The new board would sell for$25,700, and the company expects to sell 1,420 per year. Thecompany currently sells 1,920 units of its existing model per year.If the new model is introduced, sales of the existing model willfall to 1,740 units per year. The old board retails for $21,600.Variable costs are 57 percent of sales, depreciation on theequipment to produce the new board will be $1,370,000 per year, andfixed costs are $1,270,000 per year.

Required: If the tax rate is35 percent, what is the annual OCF for the project?

Reference no: EM131056724

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Annual ocf for the project

Reference no: EM131056724

Reference no: EM131056724

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