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What are the effects on the after-tax profits

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Question - A project currently generates sales of $10 million, variable costs equal to 50% of sales, and fixed costs of $2 million. The firm's tax rate is 35%.

a. What are the effects on the after-tax profits and cash flow, if sales increase from $10 million to $11 million?

b. What are the effects on the after-tax profits and cash flow, if variable costs increase to 65% of sales?

Reference no: EM133057989

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