Burrito king (a new fast-food franchise opening up nationwide) has successfully automated burrito production for itsdrive-up fast-food establishments. the burro-master 9000 requires a constant 45 seconds to produce a batch of burritos. it has been estimated that customers will arrive at the drive-up window according to a poisson distribution at an averageof one every 50 seconds. to determine the amount of space needed for the line at the drive-up window, burrito kingwould like to know the expected average time in the system, the average line length (in cars), and the average number ofcars in the system (both in line and at the window).

If a firm plans to issue new stock, flotation costs (investment bankers' fees) should not be ignored. there are two approaches to use to account for flotation costs. the first approach is to add the sum of flotation costs for the debt, preferred, and common stock and add them to the initial investment cost. because the investment cost is increased, the project's expected return is reduced so it may not meet the firm's hurdle rate for acceptance of the project. the second approach involves adjusting the cost of common equity as follows: . the difference between the flotation-adjusted cost of equity and the cost of equity calculated without the flotation adjustment represents the flotation cost adjustment. quantitative problem: barton industries expects next year's annual dividend, d1, to be $1.90 and it expects dividends to grow at a constant rate g = 4.3%. the firm's current common stock price, p0, is $22.00. if it needs to issue new common stock, the firm will encounter a 6% flotation cost, f. assume that the cost of equity calculated without the flotation adjustment is 12% and the cost of old common equity is 11.5%. what is the flotation cost adjustment that must be added to its cost of retaine