Suppose there are three stores in a shopping center that would benefit from security lights in the parking lot according to the following inverse demand functions: Store Inverse Demand A: Upper P Subscript Upper A Baseline equals 60 minus Upper QPA = 60−Q B: Upper P Subscript Upper B Baseline equals 45 minus 2 Upper QPB = 45−2Q C: Upper P Subscript Upper C Baseline equals 30 minus 2 Upper QPC = 30−2Q If security lights cost $7070 each, in other words market supply is Upper P equals 70P=70, what is the efficient quantity of lights? The efficient quantity of lights is nothing. (Enter your response rounded to the nearest integer.) Now, if each store buys its own lights, there will be nothing securtity lights purchased. (Enter your response rounded to the nearest integer.)

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?