What are the effects on cash flow

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A project currently generates sales of $2 million, variable costs equal 50% of sales, and fixed costs are $0.4 million. The firm’s tax rate is 30%. Assume all sales and expenses are cash items. a. What are the effects on cash flow, if sales increase from $2 million to $2.2 million? (Input the amount as positive value. Enter your answer in dollars not in millions.) b. What are the effects on cash flow, if variable costs increase to 60% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Reference no: EM131972377

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