For these two AW relations, the breakeven point I, in miles per year, is closest to AW1 = -23,000(A/P, 10%,10) + 4000(A/F ,10%,10) - 3000 - 3x AW 2 = -8,000(A/P,10%,4) - 2000 – 6 x 1224 1130 656 1590

The answer of the following question is given below in a detailed manner as follows:

The correct option is OPTION C ie 656 because of the reason that Breakeven point is the point where there is no profit or loss i.e. revenue is equal to the expenses. So, at breakeven quantity, the present worth of cash inflows is equal to present worth of cash outflows. Fixed cost is the cost which does not changes with the change in level of production. Variable cost is the cost which changes with the change in level of production.

Now let's Calculate the breakeven point in miles per year are as follows :

-23000(A/P,10%,10).

4000(A/F,10%,10)-3000-3x=-8000(A/P,10%,4)-2000-6x.

=3x=23000(0.1627)+1000-4000(0.06275)-8000(0.31547).

Now by solving we get 656