Hi, please help with the attached questions. Thank you.

Problem 1 1) Consider the decision by National Airlines, Inc. regarding the number of flights to operate per day on the air shuttle route between New York and Boston. Its advertising, personnel, and other expenditures to support the operation in New York and Boston amount to $24,000 per day. Flying crew, fuel, and other flight-related expenditures amount to $3,000 per round-trip flight. Landing and airport gate fees are $1,800 per round-trip flight. In addition, ground support personnel cost $2,000 per round-trip flight as company policy seeks to maintain quality service even as volume increases. National pays a commission of 5% to travel agents on a round-trip fare of $200 per passenger. A full flight carries 100 passengers. 1. How many flights in a day must National Airlines operate to make 25% profit margin if it expects the average load factor (number of passengers to the seating capacity) to be 70% per flight? 2. Suppose the load factor for National Airlines is not expected to equal 70% for each flight. Instead, the load factor is expected to be 90% for the first round-trip flight of the day and is expected to decline by 10% for each additional round-trip flight introduced in the same day. How many round-trip flights per day should National Airlines operate to maximize profit? Problem 2 2) The San Ramon Corporation makes water pumps. The Engine Division makes the engines and supplies them to the Assembly Division where the pumps are assembled. San Ramon is a successful and profitable corporation that attributes much of its success to its decentralized operating style. Each division manager is compensated on the basis of division operating income. The Assembly Division currently acquires all its engines from the Engine Division. The Assembly Division manager could purchase similar engines in the market for $400. The Engine Division is currently operating at 80% of its capacity of 4,000 units and has the following particulars: Direct materials ($125 per unit x 3,200 units) $400,000 Direct manufacturing labor ($50 per unit x 3,200 units) 160,000 Variable manufacturing overhead costs ($25 per unit x 3,200 units) 80,000 Fixed manufacturing overhead costs 520,000 All the Engine Division's 3,200 units are currently transferred to the Assembly Division. No engines are sold to the outside market. The Engine Division has just received an order for 2,000 units at $375 per engine that would utilize half the capacity of the plant. The order has either to be taken in full or rejected totally. The order is for a slightly different engine than what the Engine Division currently makes but takes the same amount of manufacturing time. To produce the new engine would require direct materials per unit of $100, direct manufacturing labor per unit of $40, and variable manufacturing overhead costs per unit of $25. Required 1. From the viewpoint of the San Ramon Corporation as a whole, should the Engine Division accept the order for the 2,000 units? 2. What range of transfer prices will result in achieving the actions determined to be optimal in requirement l, if division managers act in a decentralized manner? Use the transfer pricing rule. 3. The manager of the Assembly Division has proposed a transfer price for the engines equal to the full cost of the engines including an allocation of overhead costs. The Engine Division allocates overhead costs to engines on the basis of the total capacity of the plant used to manufacture the engines. a. Calculate the transfer price for the engines transferred to the Assembly Division under this arrangement. b. Do you think that the transfer price calculated in requirement 3a will result in achieving the actions determined to be optimal in requirement l, if division managers act in a decentralized manner? Comment in general on one advantage and one disadvantage of using full costs of the producing division as the basis for setting transfer prices Problem 3 3) Potomac Electric uses EVA to evaluate the performance of its two divisions. Following are the details: Atlantic Division Total Assets Pacific Division $1,000,000 $5,000,000 ;Current Liabilities 250,000 1,500,000 Operating Income 200,000 750,000 Potomac has a long-term debt of $3,500,000 at an interest rate of 12% and an equity capital of 3,500,000 at a cost of equity of 14%. Income tax rate is 40%. Required: 1. Calculate the EVA for both divisions. What are the potential problems in the measurement of EVA and using EVA to compare these two divisions? 2. James Chen, the chairman of Potomac, is considering one of four alternative ways to compensate division managers. Pay each division manager only a flat salary and no bonus. Make all of each division manager's compensation depend on EVA. Make all of each division manager's compensation depend on companywide EVA rather than division EVA. Use benchmarking and compensate each division manager on the basis of his or her own division's EVA minus the EVA of the other division. Assume the two divisions have comparable levels of investment and required rates of return. Assume that division managers are risk averse and do not like bearing risk. Evaluate each of the four alternatives Chen is considering. Indicate the positive and negative features of each proposal. Do you see any problems with evaluating only financial performance? How do you propose to overcome the problems? Describe your approach. Assume that the Atlantic division had expensed all R&D expenses of $ 90,000, 120,000 and 150,000 in the last three years. Assuming an amortization period of 3 years, calculate the EVA if R&D expenses were to be capitalized