Please answer the following questions:
1. A firm has fixed expenses of $3,500 per month and will sell its product for $30.00. Variable expenses are $28.00 per unit.
How many units must be sold for the firm to break even?
2. Your firm’s ks is 10%, the cost of debt is 6% before taxes, and the tax rate is 40%. Given the following balance sheet, calculate the firm’s after tax WACC:
Total assets = $25,000
Total debt = 15,000
Total equity = 10,000