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A plant hire company purchases a mobile crane for £120,000. It plans to charge £190 a day for hiring out the crane. For each day on which it is hired out the company expects to incur variable costs of £40.
(a) Work out how many days the company needs to hire out the crane in order to break even.
(b) If the variable costs are actually £55 and the hire charge has to be reduced to £180 per day, what is the new breakeven point?
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