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Relevant cash flows for a marketing campaign Marcus Tube, a manufacturer of high - quality aluminum tubing, has maintained stable sales and profits over the
Relevant cash flows for a marketing campaign Marcus Tube, a manufacturer of highquality aluminum tubing, has maintained stable sales and profits over the past years. Although the market for aluminum tubing has been expanding by per year, Marcus has been unsuccessful in sharing this growth. To increase its sales, the firm is considering an aggressive marketing campaign that centers on regularly running ads in all relevant trade journals and exhibiting products at all major regional and national trade shows. The campaign is expected to require an annual taxdeductible expenditure of $ over the next years. Sales revenue, as shown in the income statement for totaled $ If the proposed marketing campaign is not initiated, sales are expected to remain at this level in each of the next years, through With the marketing campaign, sales are expected to rise to the levels shown in the table for each of the next years; cost of goods sold is expected to remain at of sales; general and administrative expense exclusive of any marketing campaign outlays is expected to remain at of sales; and annual depreciation expense is expected to remain at $ Assuming a tax rate, find the net cash flows over the next years associated with the proposed marketing campaign.
The annual operating cash flow without the marketing campaign will be $
Data table
ata table
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tableMarcus Tube Sales ForecastYearSales revenue$
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