What are the effects on cash flow

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A project currently generates sales of $1 million, variable costs equal 40% of sales, and fixed costs are $0.2 million. The firm's tax rate is 30%. Assume all sales and expenses are cash items.

Question a. What are the effects on cash flow, if sales increase from $1 million to $1.1 million? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Question b. What are the effects on cash flow, if variable costs increase to 55% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Reference no: EM132484340

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