Question 2.A company determined to expand its existing capacity for the next three years. Assume the demand for the next three years are 15, 30, and 60, respectively and the existing capacity is 8(Note, you will need to calculate the demand of increase first for each period). The cost of capacity expansion is 100 x2where x is the amount of the capacity expanded(Note that if expansion is zero, then the cost is zero, NOT 100!). Findthe optimal capacity expansion plan for the next three years using discount rate of one.

Verizon communications, inc., provides the following footnote relating to its leasing activities in its 10-k report. the aggregate minimum rental commitments under noncancelable leases for the periods shown at december 31, 2010, are as follows: years (dollars in millions) capital leases operatingleases 2011 $97 $1,898 2012 74 1,720 2013 70 1,471 2014 54 1,255 2015 42 1,012 thereafter 81 5,277 total minimum 418 $ 12,633 rental commitments less interest and (86) executory costs present value of 332 minimum lease payments less current (75) installments long-term obligation $257 at december 31, 2010 (a) confirm that verizon capitalized its capital leases using a rate of 7.4 %. (b) compute the present value of verizon's operating leases, assuming an 7.4% discount rate and rounding the remaining lease term to 3 decimal places. (use a financial calculator or excel to compute. do not round until your final answers. round each answer to the nearest whole number.)