Q3: The sales team has been able to add a new product for an existing client to the mix. This contract will account for an additional 10% of unit production on the line immediately. What impact does this have on the project? It is expected that revenue per unit and costs per unit will be the same as the current proposal. The additional 10% increase in unit production will not have an impact on labor. According to the case, how much excess capacity will you have left after adding 10% in production?

Exhibit 5 Exhibit 5 Flat Flat Calc Flat 48000 0.94 1.77 2009 $ 84,960.00 $ $ $ 45,120.00 $ 3,600.00 $ 2,250.00 $ $ $ 18.640.00 $ $ $ 6,626.88 $ 76,236.88 $ 8,723.12 $ $ $ $ 4,000.00 $ 4,723.12 $ $ 4,480.82 $ 242.30 $ $ $ 96.92 $ 145.38 S $ $ 4,000.00 $ 4,145.38 $ -57,817,0 $ New Project Revenue Production Expenses 1% Raw Materials 3.00% Manufacturing Overhead 3% Maintenance Expense Labor Expense 7.80% Selling General and Admin Total Operating Expense EBITDA Depreciation EBIT Interest Expense EBT Taxes Net Profit Add Depreciation Total Cash Fl NPV IDD Units Unit Costs Selling Price 52000 56000 0.95 0.96 1.84 1.81 2010 94,120.00 $ 103,040.00 $ 2011 49,400.00 $ 3,708.00 $ 2,317.50 $ 53,760.00 $ 3,819.24 $ 2,387.03 $ 20,233.30 $ 22.842.40 $ 7,341.36 $ 83,000.16 $ 11,119.84 $ 8,037.12 $ 90,845.79 $ 12,194.22 $ 4,000.00 $ 7,119.84 $ 4,000.00 $ 8,194.22 $ 4,480.82 $ 2,639.02 $ 4,480.82 $ 3,713.40 $ 1,055.61 $ 1,583.41 $ 1,485.36 $ 2,228.04 $ 4,000.00 $ 4,000.00 $ 6,228.04 $ 5,583.41 $ 60000 64000 68000 68000 68000 68000 68000 1.03 0.97 0.98 0.99 1 1.01 1.02 1.88 1.99 2.03 2.07 2.12 1.92 2013 1.95 2014 2015 2016 2017 2018 2012 112,800.00 $ 122,880.00 $ 132,600.00 $ 135,320.00 $ 138,040.00 $ 140,760.00 $144,160.00 58,200.00 $ 3,933.82 $ 2,458.64 $ 62,720.00 $ 4,051.83 $ 2,532.39 $ 67,320.00 $ 4,173.39 $ 2,608.37 $ 68,000.00 $ 4,298.59 $ 2,686.62 $ 68,680.00 $ 4,427.55 $ 69,360.00 $ 70,040.00 4,560.37 $ 4,697.18 2,850.23 $ 2,935.74 2,767.22 $ 25,254.60 $ 28,174.80 $ 30,888.50 $ 31,969.60 $ 33,088.50 $ 34,246.60 $ 35,445.20 8,798.40 $ 98,645.45 $ 14,154.55 $ 9,584.64 $ 107,063.67 $ 15,816.33 $ 10,342.80 $ 115,333.05 $ 17,266.95 $ 10,554.96 $ 117,509.77 $ 17,810.23 $ 10,767.12 $ 119,730.38 $ 18,309.62 $ 10,979.28 $ 121,996.48 $ 18,763.52 $ 11,244.48 124,362.60 19,797.40 4,000.00 $ 10,154.55 $ 4,000.00 $ 11,816.33 $ 4,000.00 $ 13,266.95 $ 4,000.00 $ 13,810.23 $ 4,000.00 $ 14,309.62 $ 4.000.00 $ 14,763.52 $ 4,000.00 15,797.40 4,480.82 $ 5,673.73 $ 4,480.82 $ 7,335.51 $ 4,480.82 $ 8,786.13 $ 4,480.82 $ 9,329.41 $ 4,480.82 $ 9,828.80 $ 4,480.82 $ 10.282.70 $ 4,480.82 11,316.58 3,514.45 $ 2,269.49 $ 3,404.24 $ 2,934.21 $ 4,401.31 $ 3,731.77 $ 5,597.65 $ 3,931.52 $ 5,897.28 $ 4,113.08 $ 6,169.62 $ 5,271.68 $ 4,526.63 6,789.95 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 9,897.28 $ 7,404.24 $ 8,401.31 $ 4,000.00 $ 10,169.62 $ 4,000.00 10,789.95 9,271.68 $ 9,597.65 $ Exhibit 5 Exhibit 5 Flat Flat Calc Flat 48000 0.94 1.77 2009 $ 84,960.00 $ $ $ 45,120.00 $ 3,600.00 $ 2,250.00 $ $ $ 18.640.00 $ $ $ 6,626.88 $ 76,236.88 $ 8,723.12 $ $ $ $ 4,000.00 $ 4,723.12 $ $ 4,480.82 $ 242.30 $ $ $ 96.92 $ 145.38 S $ $ 4,000.00 $ 4,145.38 $ -57,817,0 $ New Project Revenue Production Expenses 1% Raw Materials 3.00% Manufacturing Overhead 3% Maintenance Expense Labor Expense 7.80% Selling General and Admin Total Operating Expense EBITDA Depreciation EBIT Interest Expense EBT Taxes Net Profit Add Depreciation Total Cash Fl NPV IDD Units Unit Costs Selling Price 52000 56000 0.95 0.96 1.84 1.81 2010 94,120.00 $ 103,040.00 $ 2011 49,400.00 $ 3,708.00 $ 2,317.50 $ 53,760.00 $ 3,819.24 $ 2,387.03 $ 20,233.30 $ 22.842.40 $ 7,341.36 $ 83,000.16 $ 11,119.84 $ 8,037.12 $ 90,845.79 $ 12,194.22 $ 4,000.00 $ 7,119.84 $ 4,000.00 $ 8,194.22 $ 4,480.82 $ 2,639.02 $ 4,480.82 $ 3,713.40 $ 1,055.61 $ 1,583.41 $ 1,485.36 $ 2,228.04 $ 4,000.00 $ 4,000.00 $ 6,228.04 $ 5,583.41 $ 60000 64000 68000 68000 68000 68000 68000 1.03 0.97 0.98 0.99 1 1.01 1.02 1.88 1.99 2.03 2.07 2.12 1.92 2013 1.95 2014 2015 2016 2017 2018 2012 112,800.00 $ 122,880.00 $ 132,600.00 $ 135,320.00 $ 138,040.00 $ 140,760.00 $144,160.00 58,200.00 $ 3,933.82 $ 2,458.64 $ 62,720.00 $ 4,051.83 $ 2,532.39 $ 67,320.00 $ 4,173.39 $ 2,608.37 $ 68,000.00 $ 4,298.59 $ 2,686.62 $ 68,680.00 $ 4,427.55 $ 69,360.00 $ 70,040.00 4,560.37 $ 4,697.18 2,850.23 $ 2,935.74 2,767.22 $ 25,254.60 $ 28,174.80 $ 30,888.50 $ 31,969.60 $ 33,088.50 $ 34,246.60 $ 35,445.20 8,798.40 $ 98,645.45 $ 14,154.55 $ 9,584.64 $ 107,063.67 $ 15,816.33 $ 10,342.80 $ 115,333.05 $ 17,266.95 $ 10,554.96 $ 117,509.77 $ 17,810.23 $ 10,767.12 $ 119,730.38 $ 18,309.62 $ 10,979.28 $ 121,996.48 $ 18,763.52 $ 11,244.48 124,362.60 19,797.40 4,000.00 $ 10,154.55 $ 4,000.00 $ 11,816.33 $ 4,000.00 $ 13,266.95 $ 4,000.00 $ 13,810.23 $ 4,000.00 $ 14,309.62 $ 4.000.00 $ 14,763.52 $ 4,000.00 15,797.40 4,480.82 $ 5,673.73 $ 4,480.82 $ 7,335.51 $ 4,480.82 $ 8,786.13 $ 4,480.82 $ 9,329.41 $ 4,480.82 $ 9,828.80 $ 4,480.82 $ 10.282.70 $ 4,480.82 11,316.58 3,514.45 $ 2,269.49 $ 3,404.24 $ 2,934.21 $ 4,401.31 $ 3,731.77 $ 5,597.65 $ 3,931.52 $ 5,897.28 $ 4,113.08 $ 6,169.62 $ 5,271.68 $ 4,526.63 6,789.95 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 4,000.00 $ 9,897.28 $ 7,404.24 $ 8,401.31 $ 4,000.00 $ 10,169.62 $ 4,000.00 10,789.95 9,271.68 $ 9,597.65 $