Determine what is the annual ocf for the project

Reference no: EM131997286

Question: Meld Music Company is considering the sale of a new sound board used in recording studios. The new board would sell for $28,621, and the company expects to sell 1,577 units per year. The company currently sells 2,087 units of its existing model per year. If the new model is introduced, sales of the existing model will fall to 1,808 units per year. The old board retails for $34,641. Variable costs are 47 percent of sales, depreciation on the equipment to produce the new board will be $1.2 million per year, and fixed costs are $1.28 million per year. If the tax rate is 36 percent, what is the annual OCF for the project?

Reference no: EM131997286

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