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Tilly's Travel Service has made an investment in certain equipment that cost the company $366,741. The equipment is expected to generate cash inflows of $51,000 each year.
Required:
Use your financial calculator or excel to determine how many years the equipment will have to be used in order to provide the company with a 11% return on its investment.
What contribution margin per unit will be needed on the remaining 130,000 units to cover the remaining fixed costs and to earn a profit of $210,000 this year?
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