Hi expert please give me answer general accounting question SkyTech Solutions, Inc. is a reputed supplier of high-qualitysemiconductors to electronics manufacturers. The company isconsidering expanding its sales to manufacturers of electricvehicles. It estimates additional sales of $3 million from this newmarket. However, it expects that 20% of sales will be uncollectible.Additionally, collection costs will be 3% of all new sales, and thefirm's production and selling costs amount to 75% of sales. The taxrate is 25%.Requirements:a)CalculateSkyTech's additionalnetincome.b) If SkyTech's receivables turnover is 5 times per year, what willits additional investment in accounts receivable be, and what willthe firm earn as an after-tax return on that investment?

Step 1: Definitions of Net Income: The profit remaining after deducting all expenses, including…

Answered: SkyTech Solutions, Inc. is a reputed…

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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Gamut Satellite Inc. produces satellite earth stations that sell for $150,000 each. The firm’s fixed costs, F, are $1.5 million, 20 earth stations are produced and sold each year, profits total $400,000, and the firm’s assets (all equity financed) are $5 million. The firm estimates that it can change its production process, adding $10 million to assets and $500,000 to fixed operating costs. This change will reduce variable costs per unit by $5,000 and increase output by 30 units. However, the sales price on all units must be lowered to $140,000 to permit sales of the additional output. The firm has tax loss carryforwards that render its tax rate zero, its cost of equity is 18%, and it uses no debt. Determine the variable cost per unit Determine the new profit if the change is made What is the incremental profit?
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