II. Mary Kristopher, one of the smartest students who graduated from the Washington College of Law, after working 10 years into a huge law firm decided to open her own new law office with two colleagues. They are planning to provide inexpensive legal services for people who could not otherwise afford any legal services. They are considering providing their clients with the open office for 360 days per year, 16 hours each day from 8:00 a.m. to 10:00 p.m. The professional lawyers, legal secretaries, paralegal, and clerk-receptionist for each of the two eight-hour shifts would be worked in the firm. To determine the feasibility of the project, Mary hired a marketing consultant to assist with market projections. The results of this study show that if the firm spends $980,000 on advertising the first year, the number of new clients expected each day will be 50. Mary and associates believe this number is reasonable and are prepared to spend the $980,000 on advertising. Other pertinent information about the proposed operation of the office follows: The charge to each new client would be $60 for the initial consultation. All cases that warrant further legal work will be accepted on a contingency basis with the firm earning 30 percent of any favorable settlements or judgments. Mary estimates that 20 percent of new client consultations will result in favorable settlements or judgments averaging $4,000 each. It is not expected that there will be repeat clients during the first year of operations. The hourly wages of the staff are projected to be $50 for the lawyer, $40 for the paralegal, $30 for the legal secretary, and $20 for the clerk-receptionist. Fringe benefit expense will be 40 percent of the wages paid. A total of 400 hours of overtime is expected for the year; this will be divided equally between the legal secretary and the clerk-receptionist positions. Overtime will be paid at one and one-half times the regular wage, and the fringe benefit expense will apply to the full wage. Mary has located 6,000 square feet of suitable office space which rents for $56 per square foot annually. Associated expenses will be $54,000 for property insurance and $74,000 for utilities. It will be necessary to purchase malpractice insurance, which is expected to cost $360,000 annually. The initial investment in the office equipment will be $120,000. This equipment has an estimated useful life of four years. The cost of office supplies has been estimated to be $8 per expected new client consultation. Required: I. Determine how many new clients must visit the law office being considered by Mary and colleagues for the venture to break even during its first year of operations. 2. Compute the proposed law firm's safety margin