1. Shirts Inc. sells tees, oxfords, and chambrays. Its most recent annual sales consisted of $20,000 tees, $15,000 of oxfords, and $6,000 of chambrays. The company is adding polos to the lineup and projects that this addition will result in a shift in demand for products.Sales next year are projected at $17,000 of tees, $13,000 of oxfords, $4,000 of chambrays, and $14,000 polo shirts. All changes are attributed to the polo introduction.What sales amount should be used when evaluating the polo shirt project?

2. What is the relevant year one operating free cash flow for a project that has first year sales of $15 million, operating expenses of $10.9 million, interest charges of $1 million, depreciation of $3 million and a tax rate of 25%?