Question: Problem 10-5 Sensitivity Analysis (LO3) A project currently generates sales of $1 million, variable costs equal 40% of sales, and fixed costs are $0.2 million.

Problem 10-5 Sensitivity Analysis (LO3) A project currently generates sales of $1 million, variable costs equal 40% of sales, and fixed costs are $0.2 million. The firm's tax rate is 21%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $1 million to $1.1 million? Note: Input the amount as positive value. Enter your answer in dollars not in millions. b. What are the effects on cash flow, if variable costs increase to 55% of sales? Note: Input the amount as positive value. Enter your answer in dollars not in millions

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