Question
A 1, You estimate that your soy farm will generate 2.4 million of profits on sales of 5.8 million under normal economic conditions, and that
A
1, You estimate that your soy farm will generate 2.4 million of profits on sales of 5.8 million under normal economic conditions, and that the degree of operating leverage is 5.1. What will sales be if profits turn out to be 2.8 million? Enter your answer in millions, rounded to two decimal places.
2,
A store will cost $825,000 to open. Variable costs will be 39% of sales and fixed costs are $110,000 per year. The investment costs will be depreciated straight-line over the 6 year life of the store to a salvage value of zero. The opportunity cost of capital is 6% and the tax rate is 35%.
Find the operating cash flow each year if sales revenue is $850,000 per year.
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