Geneva company manufactures dolls that are sold to various customers. the company works at full capacity for half the year to meet peak demand, and operates at 80% capacity for the other half of the year. the following information is provided: units produced and sold 600,000 units selling price $ 35 / unit variable manufacturing costs $ 20 / unit fixed manufacturing costs $ 1,200,000 / yr. variable selling and administrative costs $ 6 / unit fixed selling and administrative costs $ 950,000 / yr. geneva receives a purchase order to make 5,000 dolls as a one-time event. the good news is that this order is during a period when geneva does have excess capacity. what is the lowest selling price geneva should accept for this purchase order?

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805