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Question
Boulangerie Bouffard expects to sell 1 million croissants next year for $1.25 each. Variable cost of a croissant is $0.75. Fixed costs are $150,000, depreciation $200,000 and the tax rate is 25%. If the bakery can increase the price of a croissant to $1.50 sales will fall by 50,000 croissants. Free cash flow will increase or decrease by:A) $131,250 increase.
B) $37,500 increase.
C) $75,000 decrease.
D) $250,000 increase.
Answer
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Related questions
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