The variable cost is $40 a room per night. Fixed costs arc $5,000,000 per year. The company currently rents 200, 000 units per year, with each unit delined as one room for one night.

Should this company undertake an advertising campaign resulting in a $500,000 increase in fixed costs per year, no change in variable cost per unit, and a 10% increa.se in revenue

(resulting from an increase in the number of rooms rented)? What is the margin of safety before and after (he campaign? kj4