Question
A project currently generates sales of $10 million, variable costs equal 50% of sales, and fixed costs are $2 million. The firms tax rate is
A project currently generates sales of $10 million, variable costs equal 50% of sales, and fixed costs are $2 million. The firms tax rate is 21%. Assume all sales and expenses are cash items.
a. What are the effects on cash flow, if sales increase from $10 million to $11 million?
b. What are the effects on cash flow, if variable costs increase to 65% of sales?
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Handbook Of Asian Finance REITs Trading And Fund Performance
Authors: David Lee, Greg N. Gregoriou
1st Edition
0128009861, 978-0128009864
