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Problem 1: Cathy's Towels sells three items (which it purchases from a supplier): bath towels, hand towels, and washcloths in a 5:3:2 mix (thus, a batch of 10 towels has 5 bath towels, 3 hand towels, and 2 washcloths). Each bath towel sells for $12 and costs $6, each hand towel sells for $6 and costs $3; and each washcloth sells for $2.50 and costs $1. The shop's annual fixed expenses are $317,000, and the income tax rate, t, is 20%. How many bath towels must the firm sell at the breakeven point?
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