NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system: annual sales 47,000 units at $17 a? unit, production costs at 37% of sales price, annual fixed costs for production at $180,000. The company tax rate is 38%. What is the annual operating cash flow of the new GPS system? Should Grady Precision Measurement Tools add the GPS system to its set of products. The initial investment is $1,400,000 for manufacturing equipment, which will be depreciated over six years? (straight line) and will be sold at the end of five years for $380,000. The cost of capital is 11%.
What is the annual operating cash flow of the new GPS system?