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The following estimates have been prepared for a project: Fixed costs: $5,400 Depreciation: $3,600 Sales price per unit: $4 Accounting break-even: 5,000 units What must
The following estimates have been prepared for a project: Fixed costs: $5,400 Depreciation: $3,600 Sales price per unit: $4 Accounting break-even: 5,000 units What must be the variable cost per unit? Note: Round your answer to 2 decimal places. A project currently generates sales of $14 million, variable costs equal 50% of sales, and fixed costs are $2.8 million. The firm's tax rate is 21%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $14 million to $15.4 million? Note: Input the amount as positive value. Enter your answer in dollars not in millions. b. What are the effects on cash flow, if variable costs increase to 60% of sales? Note: Input the amount as positive value. Enter your answer in dollars not in millions
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