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Angie's Sub Shop expects to sell 200,000 subs next year at an average price of $5.00. Variable cost of a sub is $3.00. Cash fixed costs are $85,000, depreciation $95,000 and the tax rate is 25%. If the price increases to $5.50 and all other variables remain the same, how much will free cash flow increase?
Simulation
The use of models, often computerized, to replicate real-life processes, scenarios, or systems for the purpose of training, problem-solving, or prediction.
Scenario Planning
A strategic planning method that organizations use to envision and prepare for future possibilities, helping them navigate uncertainties and make flexible long-term plans.
Nominal Group Input
A technique used to generate ideas and solutions in a group setting, where participants contribute independently before collectively discussing and prioritizing suggestions.
Delphi Group Input
A technique that gathers and synthesizes expert opinions through iterative rounds of questionnaires to achieve a consensus on a specific subject.
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