Question
Wilson Leather Goods currently sells short leather jackets for $250 each.They are considering selling long coats also.The coat would sell for $425 each and the
Wilson Leather Goods currently sells short leather jackets for $250 each.They are considering selling long coats also.The coat would sell for $425 each and the company expects to sell 1600 a year.If they carry the long coat, management feels that their sales of the short jacket will decline by 350 units.Variable costs on the jacket are $99 each and $270 each on the long coat.The incremental annual fixed costs related to the long coat are $90,000 and the first years depreciation related to the long coat is $12,000.The tax rate is 34 percent.What is the projected cash flow for year one of the project?
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