What will be the effect of the price increase

Reference no: EM13261439

Chip's Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 94 percent as high if the price is raised 19 percent. Chip's variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm's FCF for the year?

Reference no: EM13261439

Questions Cloud

Find the interest which will be refunded : Patricia took out a loan for an expensive sports car. The total interest for the 34 month loan was $23,229. Find the interest which will be refunded if she pays the loan in full with 5 payments remaining.

Find the mass of the meter stick : A meter stick is pivoted at its 50-cm mark but does not balance because of non uniformities in its material that cause its center of gravity to be displaced from its geometrical center. Find the mass of the meter stick and its location of its cente..

Explain the electron in a hydrogen atom occupies : The electron in a hydrogen atom occupies a 6p orbital. What is the longest wavelength of light that can be emitted by this atom? Give answer in nanometres, nm

Write code-prompts user to enter his or her height in inches : Create a complete C++ program that prompts the user to enter his or her height in inches and outputs the following: Output "Height is six feet or more." when the user's height is 6 feet or more. Output "Height is less than five feet."

What will be the effect of the price increase : What will be the effect of the price increase on the firm's FCF for the year?

Find coeffecient of staticfriction between ladder and ground : A 14.0-m uniform ladder weighing 510 N rests against a frictionless wall. The ladder makes a 63deg angle with the horizontal. what is the coeffecient of static friction between ladder and ground

Whta is the future value of all the cash flows : Whta is the future value of all the cash flows if the appropriate discount rate is 8.3%?

Write a switch statement that outputs apple for lower case : A program has a char variable fruit that has been assigned a value. Write a switch statement that outputs "Apple" if the variable contains lower or upper case 'a', "Banana" if it contains lower or upper case 'b', or "Invalid Input" for any other v..

What is capitals after-tax wacc : If the returns required by investors are 9 percent, 13 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capital's after-tax WACC? Assume that the firm's marginal tax rate is 40 percent.

User Account

All Pages