Question
The Vinyl CD Co. is going to take on a project that is expected to increase its EBIT by $80,000, its fixed cost cash expenditures
The Vinyl CD Co. is going to take on a project that is expected to increase its EBIT by $80,000, its fixed cost cash expenditures by $125,000, and its depreciation and amortization by $75,000 next year. If the project yields an additional 10 percent in revenue, what percentage increase in the projects EBIT will result from the additional revenue?
6. Cash Flow DOL: For the Vinyl CD Co. in question 5, what percentage increase in pretax operating cash flow will be driven by the additional revenue?
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International Financial Reporting A Practical Guide
Authors: Alan Melville
6th edition
1292200743, 1292200766, 9781292200767, 978-1292200743
