Calhoun Carpets is considering a new line of carpeting for boats. The carpet would cost $3.00 a yard to make and would sell for $10.00 a yard. Calhoun would have to build a new plant and buy new equipment-at an annual cost of $4.2 million-to produce the new line.

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A. How many yards of carpet would Calhoun have to sell annually to break even? What would the company's breakeven point in sales dollars be?

B. How many yards would the company have to sell to make a target profit of \(\$ 700,000\) on the line? What is the sales dollars equivalent of that number of yards?