The Helstrom Corp. is a subcontractor in field operations to Boeing Company, manufacturer of the F18 Super Hornet multiple strike fighter aircraft. Helstrom is about to purchase diagnostics equipment to test on-board electronics systems. Estimates are:
First cost $8,000,000
Annual operating cost $100,000
Life 5 years
Variable cost per test $800 (most likely) Fixed contract income per test $1600
Use Excel’s GOAL SEEK tool to determine the breakeven number of tests per year if the variable cost per test (a) equals $800, the most likely estimate, and (b) varies from $800 to $1400. For simplicity purposes only, utilize a 0% interest rate.
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