Which of the following statements is correct? a. firms whose fixed assets are "lumpy" frequently have excess capacity, and this should be accounted for in the financial forecasting process. b. for a firm that uses lumpy assets, it is impossible to have small increases in sales without expanding fixed assets. c. when we use the afn equation, we assume that the ratios of assets and liabilities to sales (a0*/s0 and l0*/s0) vary from year to year in a stable, predictable manner. d. when fixed assets are added in large, discrete units as a company grows, the assumption of constant ratios is more appropriate than if assets are relatively small and can be added in small increments as sales grow. e. regression techniques cannot be used in situations where excess capacity or economies of scale exist.

In december of 2004, the company you own entered into a 20-year contract with a grain supplier for daily deliveries of grain to its hot dog bun manufacturing facility. the contract called for "10,000 pounds of grain" to be delivered to the facility at the price of $100,000 per day. until february 2017, the supplier provided processed grain which could easily be used in your manufacturing process. however, no longer wanting to absorb the cost of having the grain processed, the supplier began delivering whole grain. the supplier is arguing that the contract does not specify the type of grain that would be supplied and that it has not breached the contract. your company is arguing that the supplier has an onsite processing plant and processed grain was implicit to the terms of the contract. over the remaining term of the contract, reshipping and having the grain processed would cost your company approximately $10,000,000, opposed to a cost of around $1,000,000 to the supplier. after speaking with in-house counsel, it was estimated that litigation would cost the company several million dollars and last for years. weighing the costs of litigation, along with possible ambiguity in the contract, what are three options you could take to resolve the dispute? which would be the best option for your business and why?