P7-16: free cash flow valuation you are evaluating the potential purchase of a small business with no debt or preferred stock that is currently generating $42,500 of free cash flow (fcf 0=$42,500). on the basis of a review of similar-risk invest-ment opportunities, you must earn an 18% rate of return on the proposed purchase. because you are relatively uncertain about future cash flows, you decide to estimate the firm’s value using several possible assumptions about the growth rate of cash flows. a. what is the firm’s value if cash flows are expected to grow at an annual rate of 0% from now to infinity

Alocal club is selling christmas trees and deciding how many to stock for the month of december. if demand is normally distributed with a mean of 100 and standard deviation of 20, trees have no salvage value at the end of the month, trees cost $20, and trees sell for $50 what is the service level?

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.

In transportation model analysis, the stepping-stone method is used to: a. obtain an initial feasible solutionb. evaluate empty cells for possible degeneracyc. evaluate empty cells for potential solution improvementsd. identify a dummy origin pointe. balance supply and demand