The Interstate Hotel Is Considering Building a Car Wash at the Edge

question 267

Multiple Choice

The Interstate Hotel is considering building a car wash at the edge of their property. Fixed costs are estimated at $62,000 a year. The variable cost per unit is estimated at $1.75. The estimated price per car wash is $4.95. What is the base case financial break-even point if the company expects a five year project and requires a 20% return (Ignore taxes and use annuity factor 2.9906) ?

• A) 6,479
• B) 12,957
• C) 19,375
• D) 25,854
• E) 33,667

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