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24) Fairways Driving Range expects rentals to be 20,000 buckets at $3 per bucket. Equipment costs $20,000 and will be depreciated straight line over 5
24) Fairways Driving Range expects rentals to be 20,000 buckets at $3 per bucket. Equipment costs $20,000 and will be depreciated straight line over 5 years and have zero salvage value. Variable costs are 10% of rentals and fixed costs are $40,000 per year. Assume no increase in working capital and no additional capital outlays. The required return is 15% and the tax rate is 35%. What is the financial break-even quantity? Show your work
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