How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask JKCPA Your Own Question
Category: Finance
Satisfied Customers: 5884
Experience:  Bachelors degree and CPA with Accounting experience.
Type Your Finance Question Here...
JKCPA is online now
A new question is answered every 9 seconds

Cash flows from operations: Given the soaring price of fuel,

This answer was rated:

Cash flows from operations: Given the soaring price of fuel, Fiat is considering introducing a new production line of gas-electric hybrid sedans. The expected annual sales number of such hybrid cars is 30,000; the price is €22,000 per car. Variable costs of production amount to €10,000 per car. The fixed overhead including salary of top executives is €80 million per year. However, the introduction of the hybrid sedan will decrease Fiat’s sales of regular cars by 10,000 cars per year; the regular cars have a unit price of €20,000 and unit variable cost of €12,000 and fixed costs of €250,000 per year. Depreciation costs of the production plant are €50,000 per year. The marginal tax rate is 40 per cent. What is the incremental annual cash flow from operations?

Thanks for the question.

Please click here to download the solution.

Hope this helps!

If you would like to request me for future posts, please put 'For JKCPA' at the beginning of them.
JKCPA and other Finance Specialists are ready to help you