Several students have a really great business plan and decide to start a graphic T-shirt company. After initial expenses of $280, they will purchase each T-shirt wholesale for $3.99. They will then sell the each shirt for $10.99. How many must they sell to break even?

Each shirt brings in $10.99 and costs $3.99, so the amount left to cover the initial $280 expense is $10.99 − $3.99 = $7 per shirt. Divide $280 by $7 per shirt to get 40 shirts. Therefore, they must sell 40 shirts to break even.

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