Fritz, the owner of the Ritz Cafe, needs an after-tax cash flow of $27,000 next year. Principal payments on loans are $42,000 a year, and depreciation is $21,000. Tax rate for the Ritz Cafe is 25%. Fixed costs (inc11 cluding depreciation) are $55,000, and variable costs are 30% of sales revenue.

a. What level of sales revenue will provide Fritz with his desired cash flow next year?

b. Prove your answer.LO1