You have just completed a $24,000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $102,000, and if you sold it today, you would net $111,000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $31,000 plus an initial investment of $5,000 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity?

Identify the relevant incremental cash flows below:(Select all the choices that apply.)

A.Initial investment in inventory.

B.Amount you would net after taxes should you sell the space today.

C.Feasibility study for the new coffee shop.

D.Capital expenditure to outfit the space.

E.Price you paid for the space two years ago.

Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of the new pizza will be $25 million per year. While many of these sales will be to new customers, Pisa Pizza estimates that 35%

will come from customers who switch to the new, healthier pizza instead of buying the original version.

a. Assume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza?

b. Suppose that 42% of the customers who will switch from Pisa Pizza's original pizza to its healthier pizza will switch to another brand if Pisa Pizza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this case?

$ million.(Round to two decimal places.)