A project currently generates sales of $10 million, variable costs equal 50% of sales, and fixed costs
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A project currently generates sales of $10 million, variable costs equal 50% of sales, and fixed costs are $2 million. The firm’s tax rate is 21%. What are the effects of the following changes on cash flow?
a. Sales increase from $10 million to $11 million.
b. Variable costs increase to 65% of sales.
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Sales Variable Costs Fixed Costs Earnings Before Taxes Taxes Net Income Sales Variable Cost...View the full answer
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Related Book For 
Fundamentals of Corporate Finance
ISBN: 978-1260566093
10th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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