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A beauty product company is developing a new fragrance named Happy Forever. There is a probability of 0 . 4 9 that consumers will love
A beauty product company is developing a new fragrance named Happy Forever. There is a probability of that consumers will love
Happy Forever, and in this case, annual sales will be million bottles; a probability of that consumers will find the smell
acceptable and annual sales will be bottles; and a probability of that consumers will find the smell unpleasant and annual
sales will be only bottles. The selling price is $ and the variable cost is $ per bottle. Fixed production costs will be $
million per year, and depreciation will be $ million. Assume that the marginal tax rate is percent. What are the expected annual
incremental aftertax free cash flows from the new fragrance? Round answer to decimal places, eg
Annual incremental cash flows $
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