Calculate the current breakeven car washes (dollars & car washes), margin of safety and degree of operating leverage under the following scenarios:

1. If the Christians decide not to upgrade the equipment
2. If the Christians decide to upgrade the equipment

Breakeven Carwashes Current Upgrade Revenue Per Carwash Variable Costs Utilities Chemicals Maintenance Labor Total Variable Costs Contribution Margin Contribution Margin\% Fixed Costs Owners' Salaries Daughter/Son Salary Insurance Operating Costs Advertising Depreciation Total Fixed Costs Breakeven Carwashes Fixed Costs/Contribution Margin Per Carwash Total Fixed Costs Contribution Margin \$\$ Per Car Wash \$0 $0 Breakeven Car Washes Forecast and Financial Data \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|l|}{ Balance Sheet } \\ \hline & Current & Year10 \\ \hline Cash & $310,000 & $1,648,007 \\ \hline Land & 30,000 & 30,000 \\ \hline Building & 65,000 & 65,000 \\ \hline Accumulated Depreciation- Building & (65,000) & (65,000) \\ \hline Equipment (Current) & 500,000 & 750,000 \\ \hline Accumulated Depreciation- Equipment & (500,000) & (750,000) \\ \hline Total Assets & $340,000 & $1,678,007 \\ \hline Current Liabilities & $0 & $0 \\ \hline Common Stock (Current) & 75,000 & 75,000 \\ \hline Retained Earnings (Current) & 265,000 & 1,603,007 \\ \hline Total Liabilities \& Equity & $340,000 & $1,678,007 \\ \hline \end{tabular} \begin{tabular}{|lr|} \hline \multicolumn{1}{|c|}{ Investment/ Tax Information } & \\ Interest Rate & 7.00% \\ Equipment Investment & $250,000 \\ Useful Life (Years) & 10 \\ Salvage Value & $0 \\ Maintenance Cost Decrease Per Car & $0.30 \\ Wash & \\ Mega's Offer (Current) & $1,875,000 \\ After Tax Gain on Sale (Current) & $1,476,000 \\ & \\ Projected Sale Price in 10 Years & $2,500,000 \\ After Tax Gain on Sale (After 10 Years) & $1,976,000 \\ Long Term Capital Gains Tax Rate & 20.00% \\ Corporate Income Tax Rate & 21.00% \\ \hline \end{tabular} Breakeven Carwashes Current Upgrade Revenue Per Carwash Variable Costs Utilities Chemicals Maintenance Labor Total Variable Costs Contribution Margin Contribution Margin\% Fixed Costs Owners' Salaries Daughter/Son Salary Insurance Operating Costs Advertising Depreciation Total Fixed Costs Breakeven Carwashes Fixed Costs/Contribution Margin Per Carwash Total Fixed Costs Contribution Margin \$\$ Per Car Wash \$0 $0 Breakeven Car Washes Forecast and Financial Data \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|l|}{ Balance Sheet } \\ \hline & Current & Year10 \\ \hline Cash & $310,000 & $1,648,007 \\ \hline Land & 30,000 & 30,000 \\ \hline Building & 65,000 & 65,000 \\ \hline Accumulated Depreciation- Building & (65,000) & (65,000) \\ \hline Equipment (Current) & 500,000 & 750,000 \\ \hline Accumulated Depreciation- Equipment & (500,000) & (750,000) \\ \hline Total Assets & $340,000 & $1,678,007 \\ \hline Current Liabilities & $0 & $0 \\ \hline Common Stock (Current) & 75,000 & 75,000 \\ \hline Retained Earnings (Current) & 265,000 & 1,603,007 \\ \hline Total Liabilities \& Equity & $340,000 & $1,678,007 \\ \hline \end{tabular} \begin{tabular}{|lr|} \hline \multicolumn{1}{|c|}{ Investment/ Tax Information } & \\ Interest Rate & 7.00% \\ Equipment Investment & $250,000 \\ Useful Life (Years) & 10 \\ Salvage Value & $0 \\ Maintenance Cost Decrease Per Car & $0.30 \\ Wash & \\ Mega's Offer (Current) & $1,875,000 \\ After Tax Gain on Sale (Current) & $1,476,000 \\ & \\ Projected Sale Price in 10 Years & $2,500,000 \\ After Tax Gain on Sale (After 10 Years) & $1,976,000 \\ Long Term Capital Gains Tax Rate & 20.00% \\ Corporate Income Tax Rate & 21.00% \\ \hline \end{tabular}