Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A be wity product company is deveboping ancw tragrance numed Hapey For enti, Therels a probability of o al that comsumers wall kove Hapgr forever,

image text in transcribed
image text in transcribed
A be wity product company is deveboping ancw tragrance numed Hapey For enti, Therels a probability of o al that comsumers wall kove Hapgr forever, and in this cave, annual sles will be 1.04 million botties, a probabiity of 0.39 that corsumen wil fond the imell acceptable and annual sales will be 211.000 bottles: and a peabability of 0 . 14 that consinves will frad the unell ungle taat and minu sles wili be only id 000 boties. The velling price is $36 and the variable cost is 59 per bottie. Fiaed produetion costs wid be 5104 Arrual incrernetvil cashflown A beauty product company is developing a new fragrance named Happy Forever. There is a probability of 0.48 that consumers will love Happy Forever, and in this case, annual sales will be 1.04 million bottiesta probability of 0.38 that consumers wil find the smell acceptable and annual sales will be 211.000 bottes, and a probability of 0.14 that consumers will find the smell unpleasant and annual sales will be only 48,000 bottles. The selling price is $36, and the variable cost is $9 per bottle. Fixed production costs will be $104 million per year, and depreciation will be $1.17 million. Asyme that the marginal tax rate is 27 percent. What are the expected annual incremental after-tax free cash flows from the new fragrance? (Round answer to 0 decimal places es. 5.275) Annual incrementalcashflows 5

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Darknet Super Pack How To Be Anonymous Online With Tor Bitcoin Tails Fre

Authors: Lance Henderson

1st Edition

1976483220, 978-1976483226

More Books

Students also viewed these Finance questions