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Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops
Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $54 each with expected sales of 4,250 tops annually. By adding the fleece tops, management feels the firm will sell an additional 280 pairs of jeans at $66 a pair and 415 fewer T-shirts at $27 each. The variable cost per unit is $37 on the jeans, $17 on the T-shirts, and $32 on the fleece tops. With the new item, the depreciation expense is $34,000 a year and the fixed costs are $75,500 annually. The tax rate is 21 percent. What is the project's operating cash flow? $15,342 $24,496 $31,538 $20,820 $19,030
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