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Eton Company is analysing a proposed project. It expects to sell 150 units, give or take 4%. The expected variable cost per unit is $10 and the expected fixed cost is $400. The fixed and variable cost estimates are considered accurate within a plus or minus 5% range. The depreciation expense and interest expense are $300 and $100 respectively. The tax rate is 10%. The sale price is estimated at $20 a unit, give or take 5%. What is the after tax cash flow under the optimistic case scenario? A. $1002.6 B. $1114.0 C. $1302.6 D. $1272.6

Eton Company is analysing a proposed project. It expects to sell 150 units, give or take 4%. The expected variable cost per unit is $10 and the expected fixed cost is $400. The fixed and variable cost estimates are considered accurate within a plus or minus 5% range. The depreciation expense and interest expense are $300 and $100 respectively. The tax rate is 10%. The sale price is estimated at $20 a unit, give or take 5%. What is the after tax cash flow under the optimistic case scenario? A. $1002.6 B. $1114.0 C. $1302.6 D. $1272.6

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 8P
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Eton Company is analysing a proposed project. It expects to sell 150 units, give or take 
4%. The expected variable cost per unit is $10 and the expected fixed cost is $400. The 
fixed and variable cost estimates are considered accurate within a plus or minus 5% 
range. The depreciation expense and interest expense are $300 and $100 respectively. 
The tax rate is 10%. The sale price is estimated at $20 a unit, give or take 5%. What is 
the after tax cash flow under the optimistic case scenario? 
A. $1002.6 
B. $1114.0
C. $1302.6 
D. $1272.6 

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