Expected annual incremental after-tax free cash flows

Assignment Help Financial Management
Reference no: EM131606920

A beauty product company is developing a new fragrance named Happy Forever. There is a probability of 0.49 that consumers will love Happy Forever, and in this case, annual sales will be 1.08 million bottles; a probability of 0.38 that consumers will find the smell acceptable and annual sales will be 173,000 bottles; and a probability of 0.13 that consumers will find the smell unpleasant and annual sales will be only 55,000 bottles. The selling price is $37, and the variable cost is $10 per bottle. Fixed production costs will be $1.00 million per year, and depreciation will be $1.15 million. Assume that the marginal tax rate is 40 percent. What are the expected annual incremental after-tax free cash flows from the new fragrance?

Reference no: EM131606920

Questions Cloud

Company is considering buying a new farm : Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years.
The arc length of the concave-down portion of the graph : Write an expression that represents the arc length of the concave-down portion of the graph of f(x) = x4 -8x3 + 18x2 + 3x + 7.
Write a boolean function and construct a logic diagram : Write a Boolean function and construct a logic diagram of a circuit which use of basic logic gates to activate CSU main entrance door
Analyze hsa hra and fsa with examples : Analyze HSA, HRA, and FSA with examples. Examine different segments of population. Describe which socioeconomic group is likely to benefit the most from CDHPs.
Expected annual incremental after-tax free cash flows : What are the expected annual incremental after-tax free cash flows from the new fragrance?
Discuss the central message of a essay : discuss the central message of this essay. Let's talk more about that. In general, every essay will have a thesis, which reflects the main message
Effect of externality on monopoly : Explain the effect of externality on monopoly and perfectly competitive market outcomes (i.e. price and quantity) including dead-weight loss.
Describe stroebes dual process model of coping with loss : Describe Stroebe's dual process model of coping with loss. Why do you think this "balance" is important in helping one recover from grief?
How does the prisoners dilemma : Search the web and view the video clip Golden Balls - £100,000 Split Or Steal? 14/03/08.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd