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Ford Motor Company is considering launching a new line of Plug-in Electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate
Ford Motor Company is considering launching a new line of Plug-in Electric SUVs. The heavy advertising expenses associated with the new SUV launch would generate operating losses of $85 million next year from this new project. Without the new SUV, Ford expects to earn a pre-tax income of $80 million next year. Ford pays a 30% marginal tax rate on its pretax income, and the average tax rate is 25%. How much is the incremental cash flow resulting from change in tax if they launch the new line
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