3-5 Breakeven analysis Paul Scott has a 2008 Cadillac that he wants to update with a geo-tracker device so he will have access to road maps and directions. After-market equipment can be fitted for a flat fee of $500, and the service provider requires monthly charges of $20. In his line of work as a traveling salesman, he estimates that this device can save him time and money-about $35 per month (as the price of gas keeps increasing). CHAPTER 13 Leverage and Capital Structure 549 In order to determine the financial feasibility of purchasing the geo-tracker, Paul wants to determine the number of months it will take to break even. He plans to keep the car for another 3 years. a. Calculate the breakeven point for the device in months. b. Based on a, should Paul have the tracker installed in his car? 13-6 Breakeven point-Changing costs/revenues JWG Company publishes Creative Crosswords. Last year the book of puzzles sold for $10 with variable operating cost per book of $8 and fixed operating costs of $40,000. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, given the following different circumstances? a. All figures remain the same as for last year. b. Fixed operating costs increase to $44,000; all other figures remain the same. c. The selling price increases to $10.50; all costs remain the same as for last year. d. Variable operating cost per book increases to $8.50; all other figures remain the same. e. What conclusions about the operating breakeven point can be drawn from your answers