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Buttercrumbs Bakery Expects to Sell 1 Million Scones Next Year

Question 48

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Buttercrumbs Bakery expects to sell 1 million scones next year for $1.25 each.Variable cost of a scone is $0.75.Fixed costs are $150,000, depreciation $200,000 and the tax rate is 25%.If the number of scones sold increases by 10%, and all other variables remain the same, how much will free cash flow increase?

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