Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $51 each with expected sales of 3700 tops annually. By adding the fleece tops, management feels the firm will sell an additional 225 pairs of jeans at $61 a pair and 360 fewer T-shirts at $22 each. The variable cost per unit is $29 on the jeans. $13 on the T-shirts, and $25 on the fleece tops. With the new item, the depreciation expense is $31,000 a year and the fixed costs are $66,000 annually. The tax rate is 35 percent. What is the project's operating cash flow? $22.806 $33,054 $27.906 $23,694 $37,266
Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $51 each with expected sales of 3700 tops annually. By adding the fleece tops, management feels the firm will sell an additional 225 pairs of jeans at $61 a pair and 360 fewer T-shirts at $22 each. The variable cost per unit is $29 on the jeans. $13 on the T-shirts, and $25 on the fleece tops. With the new item, the depreciation expense is $31,000 a year and the fixed costs are $66,000 annually. The tax rate is 35 percent. What is the project's operating cash flow? $22.806 $33,054 $27.906 $23,694 $37,266
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to its inventory to provide a cooler weather option. The tops would sell for $51 each with expected
sales of 3,700 tops annually. By adding the fleece tops, management feels the firm will sell an additional 225 pairs of jeans at $61 a pair and 360 fewer T-shirts at $22 each. The variable cost per unit is
$29 on the jeans, $13 on the T-shirts, and $25 on the fleece tops. With the new item, the depreciation expense is $31,000 a year and the fixed costs are $66,000 annually. The tax rate is 35 percent. What
is the project's operating cash flow?
$22,806
$33,054
O $27,906
O $23,694
O $37.266
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