After spending a year and $49,000,you finally have the design of your new product ready. In order to start production, you will need $31,000 in raw materials and you will also need to use some existing equipment that you've fully depreciated, but which has a market value of $103,000. Your colleague notes that the new product could represent 10% of the company's overall sales and that 10% of overhead is $60,000. Your tax rate is 25%. As you start your analysis of the product, what should be your initial incremental free cash flow? The initial incremental free cash flow is $________.(Round to the nearest dollar. Be sure to use a negative sign if the answer is negative.)
After spending a year and $49,000,you finally have the design of your new product ready. In order to start production, you will need $31,000 in raw materials and you will also need to use some existing equipment that you've fully depreciated, but which has a market value of $103,000. Your colleague notes that the new product could represent 10% of the company's overall sales and that 10% of overhead is $60,000. Your tax rate is 25%. As you start your analysis of the product, what should be your initial incremental free cash flow? The initial incremental free cash flow is $________.(Round to the nearest dollar. Be sure to use a negative sign if the answer is negative.)
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
Section: Chapter Questions
Problem 47P: (Appendix 11A) Cycle Time, Velocity, Conversion Cost The theoretical cycle time for a product is 30...
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After spending a year and $49,000,you finally have the design of your new product ready. In order to start production, you will need $31,000 in raw materials and you will also need to use some existing equipment that you've fully depreciated , but which has a market value of $103,000. Your colleague notes that the new product could represent 10% of the company's overall sales and that 10% of overhead is $60,000. Your tax rate is 25%.
As you start your analysis of the product, what should be your initial incremental free cash flow?
As you start your analysis of the product, what should be your initial incremental free cash flow?
The initial incremental free cash flow is $________.(Round to the nearest dollar. Be sure to use a negative sign if the answer is negative.)
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