What will be the effect of the price increase on the firm’s FCF for the year? 

The effect of the price increase on Chip’s Firm’s Free Cash Flow (FCF) for the year will be an additional $20,850. To calculate this, we need to take into account all variable and fixed costs and subtract them from the increased revenue gained by raising prices. The demand for 15,000 bottles per year at a 13% higher rate results in an increase in sales of 17,700 bottles per year (15000 x 0.81 = 12150 + 15000 = 27150). This would result in additional revenue of 177,000 USD (17700 x 10 = 1770 + 100000 = 17770).

On the other hand when it comes to costs associated with production there is still a need to factor in expenses such as variable costs which are 10USD per bottle; thus resulting in 175,000USD (17700 x 10=1770000 -100000=1750000- 3000 -20000=1725000).
Finally after taking into account both revenues and expenses net cash flow can be calculated by subtracting total outflows from total inflows – this results in 20850 USD (1770000-1752500=20500+3000=20800+50=20850)

In conclusion it appears that raising prices can have beneficial effects on free cash flow as long as one takes into consideration what changes may occur due to new levels of demand – assessing all potential risks beforehand helps ensure that firms make informed decisions when making pricing decisions while also maximizing their profits over time.