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Given the desire to cut carbon emissions, Ford is considering introducing a new production of electric sedans. the expected unit sales of the electric cars
Given the desire to cut carbon emissions, Ford is considering introducing a new production of electric sedans. the expected unit sales of the electric cars is 39,000; and the selling price is 27,000 per car. Variable costs of production are $8,000 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 $5000 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. Description costs of the new production line are $51,000 per year. The marginal tax rate is 29 percent. What is the incremental annual cash flow from operations?
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