Roche Brothers is considering a capacity expansion of its supermarket. The landowner will build the addition to suit inreturn for $225,000 upon completion and a five-year lease. The increase in rent for the addition is $10,000 per month.The annual sales projected through year 5 follow. The current effective capacity is equivalent to 500,000 customers peryear. Assume a 2 percent pretax profit on sales.Click the icon to view the annual sales projections.a. If Roche expands its capacity to serve 700,000 customers per year now (end of year 0), what are the projected annuallincremental pretax cash flows attributable to this expansion?The projected annual incremental pretax cash flows attributable to this expansion in year 0 are $-225,000 (Enter yourresponse as an integer.)The projected annual incremental pretax cash flows attributable to this expansion in year 1 are $. (Enter yourresponse as an integer.)kampData TableCustomersAverage Sales per CustomerPrint560,000 600,000$50.00$53.00Done675,000$56.00700,000$60.00- Xheck

A company's cash flow may rise or fall as a result of accepting a new project or making an…

Answered: Roche Brothers is considering a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer the given question with a proper explanation and step-by-step solution. Use excel if possible.

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