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Chip?s Home Brew Whiskey management forecasts




Question;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 84 percent as high if the price is raised 17 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? (Round answers to nearest whole dollar, e.g.;5,275.)


Paper#50603 | Written in 18-Jul-2015

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