Mr.Grant is considering a capacity expansion for his store.The annual sales projected for the next five years follow.The current capacity is equivalent to $200,000 sales.Assume a 20 percent pretax profit margin.
$$\begin{array} { | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Annual Sales } \
( \$ 000 )
\end{array} \
\hline 1 & 180 \
2 & 210 \
3 & 220 \
4 & 230 \
5 & 260 \
\hline
\end{array}$$
If Grant expands his capacity to $225,000 now,what would be the increase in his pretax cash flows for each of the next five years?

Question

Mr.Grant is considering a capacity expansion for his store.The annual sales projected for the next five years follow.The current capacity is equivalent to $200,000 sales.Assume a 20 percent pretax profit margin.
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Annual Sales } \
( \$ 000 )
\end{array} \
\hline 1 & 180 \
2 & 210 \
3 & 220 \
4 & 230 \
5 & 260 \
\hline
\end{array}$$ 
If Grant expands his capacity to $225,000 now,what would be the increase in his pretax cash flows for each of the next five years?

Quizplus · Accepted Answer

The Answer of Mr.Grant is considering a capacity expansion for his store.The annual sales projected for the next five years follow.The current capacity is equivalent to $200,000 sales.Assume a 20 percent pretax profit margin.
 $$\begin{array} { | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Annual Sales } \
( \$ 000 )
\end{array} \
\hline 1 & 180 \
2 & 210 \
3 & 220 \
4 & 230 \
5 & 260 \
\hline
\end{array}$$ 
If Grant expands his capacity to $225,000 now,what would be the increase in his pretax cash flows for each of the next five years?

MrGrant Is Considering a Capacity Expansion for His Store If Grant Expands His Capacity to $225,000 Now,what Would Be