Use the information for the question(s)below.
Omicron Industries' Market Value Balance Sheet ($ Millions)
and Cost of Capital 
Omicron Industries' New Project Free Cash Flows (Millions) 
Assume that this new project is of average risk for Omicron and that the firm wants to hold constant its debt to equity ratio.
-Calculate the debt capacity of Omicron's new project for years 0,1,and 2.
Definitions:
Operation Costing System
A costing system that combines elements of both job costing and process costing, often used in manufacturing.
Job Costing System
An accounting method used to assign costs to specific jobs or projects to accurately track expenses and estimate future costs and profitability.
Operation Costing System
An Operation Costing System is a hybrid costing method used to calculate the cost of products that have both characteristics of batch-produced and continuously produced items.
Direct Materials
Raw materials that can be directly traced to the production of specific goods or services, such as wood for furniture or fabric for clothing.
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