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Homework answers / question archive / A company sells Tidbits to consumers at a price of $113 per unit
A company sells Tidbits to consumers at a price of $113 per unit. The costs to produce Tidbits is $33 per unit. The company will sell 13,000 Tidbits to consumers each year. The fixed costs incurred each year will be $140,000. There is an initial investment to produce the goods of $3,800,000 which will be depreciated straight line over 8 year life of the investment to a salvage value of $0. The opportunity cost of capital is 11% and the tax rate is 30%.
What is operating cash flow each year?
