1. You decide to create your own business designing and printing t-shirts. The fixed costs, including the design software, printing press and renting a small space for storage, are $750. Variable costs per shirt are $3.25. If you sell each shirt for $7, how many do you need to sell to make $500 in profit?
2. Apple wants to create the new iCar, a driverless car, by 2020. Assume that fixed costs (research & development, the building of a factory, the purchasing of equipment, safety testing, etc) for such a project totals $10B. If the company anticipates sales of 600,000 cars with variable costs per car of $75,000, how much does each car need to sell for to break even?
3. If a company stated in its annual report to shareholders that it made efforts to recapitalize (that is, change the capital structure) to a higher amount of leverage, you could certainly look at the balance sheet to verify this. What other financial statement, the income statement or statement of cash flows, would also show evidence? Give an example of what the evidence might look like?