Happy Sharks Limited is thinking about purchasing fiber optic directional boring equipment for its construction operations. The new equipment would cost $6,000 and they have obtained financing at 8% for 3 years compounded monthly (hint: percent divided by the total number of months). In order for it to be practical to buy the machine, there needs to be sufficient work to pay for a crew and additional equipment. Other expenses include 2 laborers at $25 per hour with an overhead factor of 2. A dump truck to haul the material and equipment at $20 per hour. Material which would be $3 per foot. Miscellaneous costs, on average, assume are $2 per foot (insurance and bonding, permitting, locating services, etc.).

 Assume there are 40 hours in a work week, 4.25 weeks per month, and 8 hours per work day. What are the fixed costs? What are the variable costs? Draw a monthly cash flow diagram for the fixed costs.