Elmdale enterprises is deciding whether to expand its production facilities. although long-term cash flows are difficult to estimate, management has projected the following cash flows for the first two years (in millions of dollars): year 1 year 2 revenues 127.7127.7 158.9158.9 cogs and operating expenses (other than depreciation) 31.931.9 55.155.1 depreciation 26.226.2 30.730.7 increase in net working capital 3.83.8 8.28.2 capital expenditures 27.627.6 35.935.9 marginal corporate tax rate 3535% 3535% a. what are the incremental earnings for this project for years 1 and 2? (note: assume any incremental cost of goods sold is included as part of operating expenses.) b. what are the free cash flows for this project for years 1 and 2?

Electronics assembly inc. is a contract manufacturer that assembles consumer electronics for a number of companies. currently, the operations manager is assessing the capacity requirements as input into a bid for a job to assemble cell phones for a major global company. the company would assemble three models of cell phones in the same assembly cell. setup time between the phones is negligible. electronics assembly inc. operates two 8-hour shifts for 275 days per year. cell phone demand forecast (phones/year) processing time (minutes/phone) mars 47,000 19.8 saturn 35,000 20.7 neptune 7,500 16.2 a. calculate total capacity required by line. b. determine the total operating time available. c. calculate the total number of assembly cells. (round up your answer to the next whole number.)

Gerda, a real estate agent, is selling a moderately priced house in a subdivision. she knows from her uncle that the factory being built half a mile from the subdivision will be manufacturing dog food, using a process that creates a very strong odor that permeates the surrounding neighborhood. a buyer, who is unaware of the type of factory under construction, makes an offer on one of the houses gerda is selling, and within a short time, the deal goes through. what does this scenario best illustrate?

Stella company sells only two products, product a and product b. product a product b total selling price $50 $30 variable cost per unit $20 $10 total fixed costs $2,110,000 stella sells two units of product a for each unit it sells of product b. stella faces a tax rate of 40%. stella desires a net afterminustax income of $54,000. the breakeven point in units would be