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 ​$60,000. Your tax rate is 25​%.
As you start your analysis of the​ product, what should be your initial incremental free cash​ flow?
The initial incremental free cash flow is ​$________.​(Round to the nearest dollar. Be sure to use a negative sign if the answer is​ negative.)
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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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