An electronics firm is currently manufacturing an item that has a variable cost of $0.45 per unit and a selling price of
$1.05 per unit. Fixed costs are $14,000 Current volume is 35,000 units. The firm can substantially improve the product
quality by adding a new piece of equipment at an additional fixed cost of $6,400. Variable cost would increase to $0.65
and the selling price would be revised to $1.25 with the expectation that the volume would be 55,000 units as a result of
a higher-quality product
If the firm does not add new equipment, its profit will be = dollars (round your response to the nearest whole
number and include a minus sign if the profit is negative).
If the firm does add new equipment, its profit will be = dollars (round your response to the nearest whole number
and include a minus sign if the profit is negative).
Based on the given information, the decision should be to
add new equipment
stay as is