Question
A project currently generates sales of $5.3 million, variable costs equal to 50% of sales, and fixed costs of $2.1 million. The firm's tax rate
| A project currently generates sales of $5.3 million, variable costs equal to 50% of sales, and fixed costs of $2.1 million. The firm's tax rate is 35%. What are the effects of the following changes on after-tax profits and cash flows? | ||
| a. | Sales increase from $5.3 million to $8.3 million. What are the effects on after-tax profits and cash flows?(Round your answers to 3 decimal places. Enter your answers in millions of dollars.) | |
After tax profits (decrease/increase) by __ million
After tax CASHflow (decrease/increase) by __ million
| Variable costs increase to 59% of sales. What are the effects on after-tax profits and cash flows? (Round your answers to 3 decimal places. Enter your answers in millions of dollars.) |
After tax profits (decrease/increase) by __ million
After tax CASHflow (decrease/increase) by __ million
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Financial Management
Authors: Rob Quail, Ricardo J. Rodriguez
2nd Edition
1557868441, 9781557868442
