Problem:
A project currently generates sales of $16 million, variable costs equal 50% of sales, and fixed costs are $3.2 million. The firm's tax rate is 21%. Assume all sales and expenses are cash items.
What are the effects on cash flow, if sales increase from $16 million to $17.6 million?
Note: Input the amount as positive value. Enter your answer in dollars not in millions.
What are the effects on cash flow, if variable costs increase to 60% of sales?
Note: Input the amount as positive value. Enter your answer in dollars not in millions.