each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 82 percent as high if the price is raised 8 percent. Chip’s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm’s FCF for the year? At $20 per bottle the Chip’s FCF is $ and at the new price Chip’s FCF is $.
Copyright © 2024 1QUIZZ.COM - All rights reserved.
Answers & Comments
Verified answer
This is posted in the wrong place