Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual unit sales of the electric cars is 39,000; and the selling price is $22,000 per car. Variable costs of production are $14,000 per car. The fixed overhead, including salary of top executives is $80 million per year. However, the introduction of the electric sedans will decrease Ford's sales of regular sedans by 8,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000, and fixed costs of $250,000 per year. Depreciation costs of the new production line are $51,000 per year. The marginal tax rate is 29 percent. What is the incremental annual cash flow from operations? Incremental annual cash flow from operations $
Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual unit sales of the electric cars is 39,000; and the selling price is $22,000 per car. Variable costs of production are $14,000 per car. The fixed overhead, including salary of top executives is $80 million per year. However, the introduction of the electric sedans will decrease Ford's sales of regular sedans by 8,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000, and fixed costs of $250,000 per year. Depreciation costs of the new production line are $51,000 per year. The marginal tax rate is 29 percent. What is the incremental annual cash flow from operations? Incremental annual cash flow from operations $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Given the desire to cut carbon emissions, Ford is considering introducing a new production line of electric sedans. The expected annual
unit sales of the electric cars is 39,000; and the selling price is $22,000 per car. Variable costs of production are $14,000 per car. The
fixed overhead, including salary of top executives is $80 million per year. However, the introduction of the electric sedans will decrease
Ford's sales of regular sedans by 8,000 cars per year; the regular sedans have a unit price of $20,000, a unit variable cost of $12,000,
and fixed costs of $250,000 per year. Depreciation costs of the new production line are $51,000 per year. The marginal tax rate is 29
percent. What is the incremental annual cash flow from operations?
Incremental annual cash flow from operations
$
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