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 Sales in Sales Dollars Calculation: Breakeven Carwashes x Revenue per Carwash Current Upgrade Breakeven Car Washes Revenue Per Car Wash (\$\$) Breakeven Dollars Alternative Method for Breakeven Carwashes using CM Fixed Costs/Contribution Margin\% Fixed Costs Contribution Margin Percent Breakeven Dollars \begin{tabular}{l} \multicolumn{3}{c}{ Margin of Safety } \\ \hline Calculation: Current Revenue - Breakeven Revenue \\ Planned Sales \\ Breakeven Sales \\ Margin of Safety \\ \hline \end{tabular} Degree of Operating Leverage Calculation: Contribution Margin/Operating Income (EBIT) Current Upgrade Current Carwashes Variable Cost per Unit Revenue Total Variable Cost Contribution Margin Fixed Costs Operating Income Before Tax Income Tax Net Operating Income Degree of Operating Leverage 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}