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As the result of purchasing new equipment costing $640,000, ABC Inc. expects the number of units it produces and sales will increase next year by
As the result of purchasing new equipment costing $640,000, ABC Inc. expects the number of units it produces and sales will increase next year by 15%. This past year the firm sold 65 units at a price of $18,000 per unit and the cost to manufacture each unit was $2,400. ABC is in a 30% tax bracket. Assuming there are no other expenses, what is the expected incremental cash flow from operations next year? We ignore the impact of CCA and depreciation.
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