Question
A project currently generates sales of $10.2 million, variable costs equal to 50% of sales, and fixed costs of $2.7 million. The firms tax rate
A project currently generates sales of $10.2 million, variable costs equal to 50% of sales, and fixed costs of $2.7 million. The firms tax rate is 35%. a. What are the effects on the after-tax profits and cash flow, if sales increase from $10.2 million to $11.9 million. (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.) After-tax profit (Click to select) by $ million. Cash flow (Click to select) by $ million.
b. What are the effects on the after-tax profits and cash flow, if variable costs increase to 70% of sales. (Input all amounts as positive values. Do not round intermediate calculations. Enter your answers in millions rounded to 3 decimal places.) After-tax profit (Click to select) by $ million. Cash flow (Click to select) by $ million.
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