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A project currently generates sales of $12 million, variable costs equal 40% of sales, and fixed costs are $2.4 million. The firm's tax rate
A project currently generates sales of $12 million, variable costs equal 40% of sales, and fixed costs are $2.4 million. The firm's tax rate is 21%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $12 million to $13.2 million? Note: Input the amount as positive value. Enter your answer in dollars not in millions. b. What are the effects on cash flow, if variable costs increase to 50% of sales? Note: Input the amount as positive value. Enter your answer in dollars not in millions. Answer is complete but not entirely correct. a. Cash flow b. Cash flow increases increases > by by $ $ 916,400 1,897,800
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