Problemdestroya extermination services projects next uears, Ask an Expert

Accounting

Problem:

Destroya Extermination Services projects next uear's sales of its new X-Ray termite inspection service at 5,000 inspections priced at $175 each. The variable costs per inspection are expected to be $87.50. Fixed cash costs are expected to be $90,000 and depreciation $10,000. The company's marginal tax rate is 34%. Destroya believes that any of its forecasts including fixed costs, nut no depreciation or the tax rate which are known for certain, could be high or low by as much as 10%.

Required:

Question: What is the expected free cash flow for the best case scenario?

$414,400
$330,000
$394,500
$383,240

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91171376

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