Girlie Gilmore plans to sell berry pies at a local farmer's market during the 3-month period of June to August. The permit and space rental will cost her P100,000 for the June through August season. The pies will sell for P420. Ingredients and overhead average P175 per pie. She also has to pay 5% of her gross sales to the market's organizers.

1. How many pies will she need to sell to cover her cash operating costs if the P100,000 includes a depreciation expense amounting to P5,000? Round-up your final answer to the nearest unit (e.g. 102.33 units should be entered as 103 units).

2. Warchester Inc. is considering the purchase of copying equipment that will require an initial investment of P500,000 and P11,000 per year in annual operating costs over the equipment's estimated useful life of 5 years. The company will use a discount rate of 8.5%. What is the equivalent annual cost?