New capacity would have to be bought or built when capacity runs out or production would have to be cut back on one of the product lines, leading to a loss in cash flows that would have been generated by the lost sales runs. Thus, Blast would result in incremental cash flows for facilities and these should be included in cash outflow calculations.

However, the case states that Blast will require only 10% of Lift-Off's plant capacity. Yet, Lift-Off has excess capacity of 45%. This indicates that Blast may not lead to the need to add capacity in the future. However, this is something that the Danforth & Donnalley executives should explore further with detailed market forecasts. The case states that Blast is very different from conventional powdered products and may well generate tremendous demand requiring more capacity in the 15 years of time considered.

In summary, even when considering...
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