Eli Lilly is very excited because sales for his nursery and plant company are expected to double from $710,000 to $1,420,000 next year. Eli notes that net assets (Assets − Liabilities) will remain at 60 percent of sales. His firm will enjoy an 8 percent return on total sales. He will start the year with $310,000 in the bank and is bragging about the Jaguar and luxury townhouse he will buy. 1. Does his optimistic outlook for his cash position appear to be correct?2. Compute his likely cash balance or deficit for the end of the year. Start with beginning cash and subtract the asset buildup (equal to 50 percent of the sales increase) and add in profit.

Sailcloth & more currently produces boat sails and is considering expanding its operations to include awnings for homes and travel trailers. the company owns land beside its current manufacturing facility that could be used for the expansion. the company bought this land 5 years ago at a cost of $319,000. at the time of purchase, the company paid $24,000 to level out the land so it would be suitable for future use. today, the land is valued at $295,000. the company has some unused equipment that it currently owns valued at $38,000. this equipment could be used for producing awnings if $12,000 is spent for equipment modifications. other equipment costing $490,000 will also be required. what is the amount of the initial cash flow for this expansion project?