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 90 percent as high if the price is raised 10 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?

Using Excel, click on any cell, click on fx then click on the PMT function. A dialog box will open. Put 5%/12 in the Rate section, put 12 in the...

Sales taxes are administrative costs, which would be deducted currently. In a capital lease, there are no rent payments to allocate. Depreciation may be allocated if the asset is employed...

11%.

Multiply the percentage of food sales (80%) by total sales ($348,902); then multiply the results by the food cost percentage (29.34%) to get the dollar cost of food. The answer...

Margin cost is calculated from total cost, which includes both fixed costs and variable costs. If you tried to calculate your marginal costs based solely on the change in variable...

Marginal cost is the additional costs incurred when you produce one additional unit of your product. Marginal revenue is the additional revenue you'll receive when you produce that additional unit....

To calculate fixed and variable costs, you will need more information than just the total cost and quantity produced. You will need to know either fixed costs or variable costs...

In order to calculate volume produced, you will need enough information. If you know the total variable cost (TVC) and unit variable cost (UVC), you can divide them(TVC/UVC) to get...

The current ratio indicated by these numbers is 3.14, which would generally indicate a healthy position at the point in time that this measurement was made. How much would it...

Total fixed costs should remain the same. The fixed cost per unit will vary according to how many units are produced. For example, if fixed costs were $4000, and 400...