1. Calculate the contribution per mile and total annual contribution associated with accepting FHPs proposal. What do you recommend? (Use 52 weeks per year in your calculations.)
2. Consider the strategic implications (including risks) associated with expanding (or choosing not to expand) operations to meet the demands of FHP. Analyze this question from a conceptual point of view. Calculations are not necessary.

Exhibit 1 Income from Operations (All financial information in the case has been scaled and disguised for educational purposes.) Cascade Trucking and Freight Income from Operations For the year ending December 31, 2013 Revenue Line Haul Fuel Surcharge Miscellaneous Total Revenue EYE 12/31/2013 $20,925,280 4,950,160 450,120 $26,325,570 Per Mile $1.06 0.44 $2.34 0.06 0.78 0.01 Variable Expenses Insurance Fuel Oil Lubricants Tolls Parts and Small Tools Hourly Wages: Drivers Trailer Pool Expense Total Variable 675,120 8.775,190 112,700 112,550 787,630 4,950, 160 _255.120 15,638,480 0.01 0.07 0.44 0.02 1.39 0.01 0.02 0.02 0.02 0.01 Fixed Expenses Insurance General Liability Physical Damago Workers Compensation Health Insurance Security Depreciation Salaries, Benefits (Garage Salaries, Benefits (Office) Bad Debt Expense Permits Rental Equipment Payroll Taxes Accounting Fees, Supplies, Computer Maintenance Miscellaneous Total Variable 112,620 225,010 226,000 224,500 111,750 2,137,500 675,000 1,012,520 113,500 111.520 1,013,000 562,500 112.350 337,510 6.975,280 0.19 0.06 0.09 0.01 0.01 0.09 0.05 0.01 0.03 0.62 $3,681,810 $0.33 Income from Operations Notes Por me values are based on 11.250.000 miles and a boor riched to deal place 6