What is the Year 1 net operating cash flow based on the following information?

		Sales revenues, each year		$85,000
		Capital cost allowance		$8,500
		Cash operating costs		$35,000
		Interest expense		$8,000
		Tax rate		15.0%

		$35,700
		$48,000
		$43,775
		$42,000

Tony thinks that a shares expected return is greater than its required return. What does this suggest?

		Tony thinks dividends are not likely to be declared.
		Tony thinks the share is a good buy.
		Tony thinks the share is experiencing supernormal growth.
		Tony thinks the share should be sold.

Eco Inc. has identified two methods for producing eco-friendly bottles of bathroom cleaners. One method involves using a machine having a fixed cost of $17,000 and variable costs of $1.00 per bottle. The other method would use a less expensive machine (fixed cost = $6,000), but with greater variable costs ($1.80 per bottle). If the selling price per bottle is the same under each method, at what level of output will the two methods produce the same net operating income (EBIT)?

		13,750 bottles
		8,750 bottles
		11,250 bottles
		6,000 bottles