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Business, 30.07.2021 03:30 tylersabin72

Schweser Satellites Inc. produces satellite earth stations that sell for $95,000 each. The firm's fixed costs, F, are $2.5 million, 50 earth stations are produced and sold each year, profits total $500,000, and the firm's assets (all equity financed) are $4 million. The firm estimates that it can change its production process, adding $4.5 million to assets and $380,000 to fixed operating costs. This change will reduce variable costs per unit by $12,000 and increase output by 15 units. However, the sales price on all units must be lowered to $88,000 to permit sales of the additional output. The firm has tax loss carryforwards that render its tax rate zero, its cost of equity is 16%, and it uses no debt. What is the incremental profit

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Schweser Satellites Inc. produces satellite earth stations that sell for $95,000 each. The firm's fi...
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