Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to...
80.2K
Verified Solution
Link Copied!
Question
Finance
Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $48 each with expected sales of 4,550 tops annually. By adding the fleece tops, management feels the firm will sell an additional 310 pairs of jeans at $60 a pair and 445 fewer T-shirts at $21 each. The variable cost per unit is $31 on the jeans, $11 on the T-shirts, and $26 on the fleece tops. With the new item, the depreciation expense is $28,000 a year and the fixed costs are $78,500 annually. The tax rate is 34 percent. What is the project's operating cash flow?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
