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  3. a project currently generates sales of $2 million,

A project currently generates sales of $2 million, variable costs equal 50% of sales, and...

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Accounting

A project currently generates sales of $2 million, variable costs equal 50% of sales, and fixed costs are $.4 million. The firms tax rate is 30%. Assume all sales and expenses are cash items.

a.

What are the effects on cash flow, if sales increase from $2 million to $2.2 million? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash flow (Click to select)increasesdecreases by $

b.

What are the effects on cash flow, if variable costs increase to 60% of sales? (Input the amount as positive value. Enter your answer in dollars not in millions.)

Cash flow (Click to select)increasesdecreases by $

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