Question
3. A cost-cutting project will decrease costs by $37,400 a year. The annual depreciation on the project's fixed assets will be $4,700 and the tax
3. A cost-cutting project will decrease costs by $37,400 a year. The annual depreciation on the project's fixed assets will be $4,700 and the tax rate is 34 percent. What is the amount of the change in the firm's operating cash flow resulting from this project? A. $21,582 B. $26,791 C. $25,805 D. $23,610 E. $26,282
4. Cinram Machines has the following estimates for its new gear assembly project: price = $1,870 per unit; variable costs = $949 per unit; fixed costs = $1.4 million; quantity = 42,000 units. Suppose the company believes all of its estimates are accurate only to within 3 percent. What value should the company use for its total variable costs when performing its best-case scenario analysis? A. $38,578,064 B. $39,822,128 C. $38,216,051 D. $41,802,137 $40,864,538
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