Npv grady precision measurement tools has forecasted the


Question: NPV. Grady Precision Measurement Tools has forecasted the following sales and costs for a new GPS system: annual sales of 45,000 units at $18 a unit, production costs at 38% of sales price, annual fixed costs for production at $210,000. The company tax rate is 30?%. 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 $1,440,000 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?

What is the after-tax cash flow of the GPS system at disposal?

What is the NPV of the new GPS system?

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