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ElectricEye Technonogies is considering introducing a new line of optic devices. The expected annual sales number of the devices is 10,000 per year; the price is $5,000 per device, and the variable costs of production amount to $2,000 per unit. The fixed costs (including depreciation) are $10 million per year. Depreciation costs are $5 million per year. The marginal tax rate is 40%. What is the incremental annual cash flow from operations for the new line?

$25 million

$20 million

$17 million

$12 million

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M955085

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