XYZ Corp. is considering introducing a new 90 flat screen television/monitor for the consumer market. ....
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XYZ Corp. is considering introducing a new 90" flat screen television/monitor for the consumer market. . The company will have to purchase a new machine to produce the screens. The machine's after-tax price would be $1,000,000 and was fully depreciated at the time of purchase. . Last year, a market research study for the new product cost $1,500,000. . The company's interest expense each year will be $350,000. . Because the new product line is similar to another of XYZ's existing products, the new screens are expected to reduce the sales of the company's current large screen TV's by $650,000 per year. - The screen is expected to generate sales revenue of $5,000,000 per year. Each year the operating costs (not including depreciation) are expected to be 2,000,000. . The company's tax rate is 25%. What is the annual expected incremental operating cash flow? $1,375,000 $2,378,000 $2,250,000 $1,987,500 $1,762,500 XYZ Corp. is considering introducing a new 90" flat screen television/monitor for the consumer market. . The company will have to purchase a new machine to produce the screens. The machine's after-tax price would be $1,000,000 and was fully depreciated at the time of purchase. . Last year, a market research study for the new product cost $1,500,000. . The company's interest expense each year will be $350,000. . Because the new product line is similar to another of XYZ's existing products, the new screens are expected to reduce the sales of the company's current large screen TV's by $650,000 per year. - The screen is expected to generate sales revenue of $5,000,000 per year. Each year the operating costs (not including depreciation) are expected to be 2,000,000. . The company's tax rate is 25%. What is the annual expected incremental operating cash flow? $1,375,000 $2,378,000 $2,250,000 $1,987,500 $1,762,500
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Related Book For
Management And Cost Accounting
ISBN: 9781292232669
7th Edition
Authors: Alnoor Bhimani, Srikant M. Datar, Charles T. Horngren, Madhav V. Rajan
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