Question
1. In The Ballpark (ITB) Corporation is considering a project and has developed the following estimates: unit sales = 120,000, price per unit = $220,
1. In The Ballpark (ITB) Corporation is considering a project and has developed the following estimates: unit sales = 120,000, price per unit = $220, variable cost per unit = $170, annual fixed costs = $38,000. The depreciation is $25,000 per year and the tax rate is 21 percent. What effect would a decrease of 10% in the unit sales have on the operating cash flow?
2. Bob's Your Uncle Corporation is considering a project and has developed the following estimates: unit sales = 9,200, price per unit = $71, variable cost per unit = $44, annual fixed costs = $15,200. The depreciation is $18,800 per year and the tax rate is 21 percent. What effect would an increase of $2 in the selling price have on the operating cash flow?
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