Question: PRACTICE : I NEED HELP SETTING UP THE EXCEL FILE. Gas & Go is considering offering movie rentals through a self-service company that would locate

PRACTICE : I NEED HELP SETTING UP THE EXCEL FILE.

Gas & Go is considering offering movie rentals through a self-service company that would locate a machine on the inside of the market store. BlueBox would charge an annual lease fee of $500 for delivery, setup and maintenance, and there is an energy cost of $0.08 for every video rented.GreenFilms would charge an annual lease of only $400, but the energy cost for every video rental is $0.10 due to the larger size of the machine. Customers rent each movie for $1.00, regardless of the company, and the Gas & Go would earn 30% of that revenue for each rental.

a. What is the annual break-even point for each option? (10 pts)

b. At what volume in number of rental transactions would the two options have the same cost? (10 pts)

c. At what forecasted volume should Gas & Go select BlueBox and what volume should the company select GreenFilms and why? (5 pts)

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