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A project currently generates sales of $6 million, variable costs equal 40% of sales, and fixed costs are $1.2 million. The firms tax rate is
A project currently generates sales of $6 million, variable costs equal 40% of sales, and fixed costs are $1.2 million. The firms tax rate is 30%. Assume all sales and expenses are cash items. |
a. | What are the effects on cash flow, ifsales increase from $6 million to $6.6 million?(Input the amount as positive value.Enter your answer in dollars not in millions.) |
Cash flow(Click to select)increasesdecreasesby $ |
b. | What are the effects on cash flow, if variable costs increase to 55% of sales?(Input the amount as positive value.Enter your answer in dollars not in millions.) |
Cash flow(Click to select)increasesdecreasesby $ |
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