Question $1$:

Happy Sharks Limited is thinking about purchasing fiber optic directional boring equipment for its construction operations. The new equipment would cost $$6,000$ and they have obtaining financing at $8\%$ for $3$ years compounded monthly $($hint: percent divided by total number of months$).$ In order for it to be practical to buy the machine, there needs to be sufficient work to pay for a crew and additional equipment. Other expenses include $2$ laborers at $$25$ per hour with an overhead factor of $2.$ A dump truck to haul the material and equipment at $$20$ per hour. Material which would be $$3$ per foot. Miscellaneous costs, on average, assume are $$2$ per foot $($insurance and bonding, permitting, locating services, etc.$).$ Assume there are $40$ hours in a work week, $4\mathrm{.}25$ weeks per month, and $8$ hours per work day. What are the fixed costs? What are the variable costs? Draw a monthly cash flow diagram for the fixed costs.

Question $2$:

Continuing Question $1.$ Combining the month fixed costs in problem $1$ and assuming X is the variable unit $($y $=$ mx $+$ b$),$ write an equation for the costs. If Happy Sharks Limited is able to bill the client $$20$ per foot for fiber optic conduit installed, how many feet of fiber optic conduit must be installed over the course of a month to break$-$even? If Happy Sharks Limited wants a profit of $$15,000$ for that crew over the course of a month, how much fiber optic conduit must be installed? If the crew can only install $800$ feet of conduit, on average, per day $($assume $5$ day work week and $4\mathrm{.}25$ weeks per month$),$ is the crew able to meet the break$-$even amount and the $$15,000$ profit amount? Negative profit is a possibility.

Question $3$:

Based on the limitations in Question $2,$ what is the maximum amount of profit and footage, on average, a crew is able to install per month? Negative profit is a possibility.

Question $4$:

A crew of two, each has to complete $60$ hours of safety training per year $($in practice, usually done during the winter when construction is slow$).$ Assume that the training is done during overtime at $1\mathrm{.}5$ times the base pay $($but overhead remains the same$)$ and is done all at once at the end of the year. Using the interest rate from Question $1,$ how much does the training add to the total costs each month?

Question$5$:

: in real life, companies hire subcontractors in order to shift the fixed costs of

labor over to a variable cost. It reduces the risks to the main company. Slow work load, less paid out. Also subcontracting works well for professional services the main company may need only periodically. An example may be the main company may only need a lawyer to review contracts once every few months, not enough work load to warrant hiring a lawyer full$-$time but still a service that is needed. The subcontractors need to make sure they are getting paid enough to cover costs associated with $$riding the wave$$ otherwise it isn$$t a good situation. Recently I am seeing new reports on the $$gig economy$,$ which is young people taking on multiple $$gigs$$ to survive. Gigs work$/$subcontractor work for professional services or services that require specialized skill$/$knowledge usually do OK$,$ requires marketing$/$networking which is another long comment set $.....$ gig work$/$subcontractor work for low skill$/$knowledge usually turn out bad unless able to coordinate bulk services, which is another comment set. The bad pay hourly example from Module $1$ is an example of what I have heard people getting paid in some sectors$.$ If you are able to get yourself into a professional services position or able to coordinate bulk services, you$$ll do fine. How do you think there are multi$-$millionaires who have little more than a high school diploma?