Question
A project currently generates sales of $11.6 million, variable costs equal to 50% of sales, and fixed costs of $3.8 million. The firms tax rate
| A project currently generates sales of $11.6 million, variable costs equal to 50% of sales, and fixed costs of $3.8 million. The firms tax rate is 30%. |
| a. | What are the effects on the after-tax profits and cash flow, if sales increase from $11.6 million to $13.8 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)decreasedincreased by $ million. | |
| Cash flow (Click to select)increaseddecreased by $ million. |
| b. | What are the effects on the after-tax profits and cash flow, if variable costs increase to 55% 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)increaseddecreased by $ million. | |
| Cash flow (Click to select)increaseddecreased by $ million. |
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Financial Management For Public Health And Not For Profit Organization
Authors: Steven A. Finkler
3rd International Edition
0138152772, 9780138152772
