A project currently generates sales of $5.3 million, variable costs equal to 50% of sales, and fixed costs of $2.1 million. The firm's tax rate is 35% What are the effects of the following changes on after-tax profits and cash flows? a. Sales increase from $5.3 million to $8.3 million (Round your answers to 3 decimal places. Enter your answers in millions of dollars) After-tax profits After-tax cash flow by by After tax profits After-tax cash flow million million b. Variable costs increase to 59% of sales (Round your answers to 3 decimal places. Enter your answers in millions of dollars.) million million

A project currently generates sales of $5.3 million, variable costs equal to 50% of sales, and fixed costs of $2.1 million. The firm's tax rate is 35% What are the effects of the following changes on after-tax profits and cash flows? a. Sales increase from $5.3 million to $8.3 million (Round your answers to 3 decimal places. Enter your answers in millions of dollars) After-tax profits After-tax cash flow by by After tax profits After-tax cash flow million million b. Variable costs increase to 59% of sales (Round your answers to 3 decimal places. Enter your answers in millions of dollars.) million million

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter10: Project Cash Flows And Risk

Section: Chapter Questions

Problem 15PROB

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