Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual unit sales of the

image text in transcribed
image text in transcribed
Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual unit sales of the electric cars is 26,000 ; and the selling price is $21,000 per car. Variable costs of production are $11,000 per car. The fixed overhead, including salary of top executives is $80 million per year. However, the introduction of the electric sedans will decrease Ford's sales of regular sedans by 9,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000, and fixed costs of $250,000 per year. Depreciation costs of the new production line are $49,000 per year. The marginal tax rate is 29 percent. What is the incremental annual cash flow from operations? Incremental annual cashflow from operations $ Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual unit sales of the electric cars is 31,000 ; and the selling price is $25,000 per car. Variable costs of production are $11,000 per car. The fixed overhead, including salary of top executives is 580 million per year. However, the introduction of the electric sedans will decrease Ford's sales of regular sedans by 10,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000. and fixed costs of $250,000 per year. Depreciation costs of the new production line are $50,000 per year. The marginal tax rate is 29 percent. What is the incremental annual cash flow from operations? Incremental annual cash flow from operations $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Mining Valuation Handbook Mining And Energy Valuation For Investors And Management

Authors: Victor Rudenno

4th Edition

0730377075, 978-0730377078

More Books

Students also viewed these Finance questions

Question

Write out the payoff table for the control device situation.

Answered: 1 week ago

Question

Do you think physicians should have unions? Why or why not?

Answered: 1 week ago