HW 1 - Please complete all work in excel. Use excel to make calculations (cells can be clicked on to veiw any formulas used) and be sure to identify your answer, including units.

2. Lucy Liquor is considering offering an ice through a contract company that would locate a machine on the outside of the store. There are two contract companies Lucy Liquor is considering, Polar Ice and Ice Express. Polar ice would charge an annual lease fee of $900 for set-up of the machine and for this machine, there is a utility cost of $0.15 for every bag of ice and Polar ice would charge Lucy Liquor an incremental cost of $0.07. For Ice Express, the annual lease fee is $600, the utility cost is $0.18 for every bag of ice and Ice Express would charge Lucy Liquor an incremental fee of $0.09. Lucy Liquors customers would pay $1 per bag of ice. a. What is the annual break-even point for each option? (10 pts) b. At what volume in number of bags of ice would the two options have the same cost? (10 pts) C. At what forecasted volume should Lucy Liquor select Polar Ice and what volume should they select Ice Express and why? (5 pts)