A project currently generates sales of $19 million
Question
A project currently generates sales of $19 million, variable costs equal 40% of sales, and fixed costs are $3.8
million. The firm’s tax rate is 35%. Assume all sales and expenses are cash items.
| a. | What are the effects on cash flow, if sales increase from $19 million to $20.9 million? (Input the amount as positive value. Enter your answer in dollars not in millions.) |
| Cash flow (Click to select)increasesdecreases by $ |
| b. | What are the effects on cash flow, if variable costs increase to 50% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.) |
| Cash flow (Click to select)increasesdecreases by $ Please show work. Thank you! |
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"
