Burke's Corner currently sells blue jeans and T-shirts. Management is considering adding fleece tops to itsinventory to provide a cooler weather option. The tops would sell for $46 each with expected sales of 4,650tops annually. By adding the fleece tops, management feels the firm will sell an additional 320 pairs of jeans at$58 a pair and 455 fewer T-shirts at $19 each. The variable cost per unit is $29 on the jeans, $9 on the T-shirts,and $24 on the fleece tops. With the new item, the depreciation expense is $26,000 a year and the fixed costsare $79,500 annually. The tax rate is 40 percent. What is the project's operating cash flow?Multiple Choice$15,782$26,918$21,412$21,242

Variables in the question: Tops Jeans…

Answered: Burke's Corner currently sells blue…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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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 $55 each with expected sales of 3,900 tops annually. By adding the fleece tops, management feels the firm will sell an additional 245 pairs of jeans at $65 a pair and 380 fewer T-shirts at $26 each. The variable cost per unit is $33 on the jeans, $17 on the T-shirts, and $29 on the fleece tops. With the new item, the depreciation expense is $35,000 a year and the fixed costs are $70,000 annually. The tax rate is 21 percent. What is the project's operating cash flow? $28,328 $26,084 $39,596 $30,188 $35,648 Please answer fast i give you upvote.
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