You are working for Eagle Golf Corporation as described in Problem 12.35. A different equipment manufacturer is recommending its “Wedge 2100” club-making machine. The initial cost of the Wedge 2100 is $1,070,000, and the fixed costs of production will be $260,000 per year. However, because the Wedge 2100 is much more efficient than the original machine, its variable cost per unit will be $63. Assume that you will choose one of the two machines.

(a) If the other financial information in Problem 12.35 applies, do you recommend the original machine or the Wedge 2100?

(b) After seeing a news report that the demand for golf equipment is surging, your CFO believes that the most likely sales outcome is 15,000 units per year. Does the updated sales forecast from the CFO change your recommendation?