What is operating cash flow year

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A company will sell Thingamajigs to consumers at a price of $81 per unit. The variable cost to produce Thingamajigs is $50 per unit. The company expects to sell 19,000 Thingamajigs to consumers each year. The fixed costs incurred each year will be $110,000. There is an initial investment to produce the goods of $2,100,000 which will be depreciated straight line over the 14 year life of the investment to a salvage value of $0. The opportunity cost of capital is 10% and the tax rate is 37%.

A) What is operating cash flow each year?

B) Using the operating cash flow, what is the net present value of this investment?

Reference no: EM132483066

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