Question 39 Suppose a firm operates a garment manufacturing plant which has a $350,000 fixed cost. The plant produces suits that can be sold for $400. The firm spends $195 to make each suit. To breakeven, how many suits should the firm sell? Enter your answer in the following format: 1,234; Hint #1: Answer is between 1400 and 1878 Question 40 ABC software is trying to establish its optimal capital structure. It currently has 30% debt and 70% equity However, the fimm CEO believes that the firm should use more debt. The risk-free rate is 3% and the market risk premium is 5%, The firm's tax rate is 35% and the cost of equity is 10%, as determined by the CAPM Assume that the firm changed its capital structure to 40% debt and 60% equity. How much should be the new cost of equity for this company? Enter your answer in the following format: 0.1234 Hint #1: Answer is between 0.0944 and 0.1291